Preamble

The House met at Eleven of the Clock, Mr. SPEAKER in the Chair.

PRIVATE BUSINESS.

STANDING ORDERS (PRIVATE BUSINESS), TABLE OF FEES.

The CHAIRMAN of WAYS and MEANS (Mr. James Hope): I beg to move, in page 261, line 25, to leave out the words "for the execution of a work."
This, and the other Amendments on the Paper, represent a proposal to increase the fees on the promotion of Private Bills. It is felt that certain services which are rendered by the House in the promotion of Private Bills might pay a little more, in particular when the promotions involve large capital sums, and that those fees should be made proportionate to those sums. That is the main object of these proposals. They do not involve very much money. They mean only a small contribution of some thousands a year to the revenue. We have gone into the matter very carefully, and now ask for the authority of the House to carry these proposals into effect. The increase will be very small.

Captain WEDGWOOD BENN: I do not profess to be qualified to express an expert opinion, but it is rather surprising that, on the last day of the Session, the Chairman of Ways and Means should come down with a proposal which appears to lay a heavy charge upon private persons or upon local authorities who are promoting Bills before this House. I would like to know what consultation has taken place. For example, there was a case in which I was very much interested lately. The City of Edinburgh sought to amalgamate the town for which I was the Member, and very heavy charges were laid upon the town and the city by this process. The Scottish people always complain a great deal about having these matters brought up to London to be discussed, and would desire to have them
discussed locally. Are they to be told now that, in addition to the hardship of having to come to London to have these matters discussed in this Parliament, they are also by a Motion which, with great respect, the right hon. Gentleman explained perfunctorily to the House of Commons, to have their charges increased, to what extent we do not know, when local authorities come before the House for private legislative purposes? We must know more about this proposal before it can be adopted. I would suggest that the right hon. Gentleman should either give a fuller explanation of the matter to us, or refer it to a Committee representing all parties and the three countries concerned, Northern Ireland. Scotland and England. I do not know what consultation has taken place, and the matter deserves further consideration.

Mr. SNOWDEN: As I understand this matter, it is one which has received the attention of the Association of Municipal Corporations for a long time past. I believe that they were under the impression that the fees were to be raised in every case where Parliamentary sanction was sought, but as I understand it now there will be no increase of fees unless the Bill proposes to apply for powers in reference to sums exceeding £1,500,000.

The CHAIRMAN of WAYS and MEANS: There will be certain charges for services rendered, like copying, and certain charges for extra days in the Court of Referees.

Mr. SNOWDEN: That I quite understand, and in view of the information which has come to the Association of Municipal Corporations I believe that they do not now press their objections, at any rate, to the proposal which the right hon. Gentleman is now submitting to the House of Commons.

Sir DOUGLAS NEWTON: I would like to support the objection raised by the hon. and gallant Member for Leith (Captain Benn). I feel that we should receive more information regarding the proposals which, at any rate, though they may not place very heavy additional burdens on the ratepayers, do place an additional load on them. Moreover, while there is an objection from the ratepayer's point of view, there is an even more valid objection from the
point of view of private undertakings. Under the proposals, as I understand them, these fees are to be increased by anything from 20 to 33 per cent, where the powers sought under a Bill involve more than a certain sum. In regard to promoters who promote Bills and do not appear by counsel, their daily fees will be increased by no less than 100 per cent. That increase does call for some explanation on the part of those who are asking the House to sanction this arrangement. I support the appeal that this matter be referred to a Committee or some other body, so that the House may be in full possession of all the facts and all the reasons for this very substantial increase in fees.

The FINANCIAL SECRETARY to the TREASURY (Mr. Guinness): I hope that the House will assent to this small addition. It has been under discussion in the Treasury, with the Chairman of Ways and Means, for a long time past. We have drawn attention to the fact that the Private Bill procedure of this House is costing the public something like £30,000 a year. We pressed for very much heavier additions to the fees, £4,000 or £5,000 a year more than the Chairman of Ways and Means could see his way to adopt. This particular proposal is a modification of our request. It does not raise the fees all round; it deals only with certain special cases.

Captain BENN: Have any Scottish authorities been consulted? The right hon. Gentleman mentioned the Association of Municipal Corporations, but that is not a Scottish body.

Mr. KIRKWOOD: On behalf of Scotland, I wish to protest against this method of rushing an item of this sort through the House at a moment's notice, when there are very few Members present, and when we least expected that a proposal of this description would be brought forward. We must have regard to the fact that we have just dealt with a number of Bills from the west of Scotland. Clydebank asked for an extension of area in order to meet housing demands, and Glasgow asked for an extension of area in order to meet similar clamant demands, These Bills have cost the west of Scotland over £250,000, but still the voracious
appetite of the average Englishman in wringing money from us in the west of Scotland is not satisfied.

The CHAIRMAN of WAYS and MEANS: Probably I can appease the hon. Member for the moment. This Motion has been on the Paper for some days, and I have put it there in order to deprive anyone of a grievance as to notice. The usual diligence of the hon. and gallant Member for Leith (Captain Benn), in studying the Order Paper daily, has been at fault on this occasion. The only reason why I want to get this Motion passed is that the Amendments to the Standing Orders could be printed before the autumn. I shall be very glad if hon. Members will give an exhaustive study to the proposal during the Recess, and I am sure that they will then be convinced of its reasonableness, and will see that it is fully justified. But in view of the objection taken by hon. Members from Scotland, I will not persist in the Motion.

Amendment, by leave, withdrawn.

Oral Answers to Questions — INTERNATIONAL MEDICAL CONGRESS.

Dr. WATTS: 1.
asked the Secretary of State for the Home Department if the Factory Department of the Home Office is to be represented at the Fourth International Medical Congress of Industrial Accidents and Diseases, to be held at Amsterdam in September next?

The UNDER-SECRETARY of STATE for the HOME DEPARTMENT (Mr. G. Locker-Lampson): No, Sir. I hardly think it necessary for the Department to be officially represented. We shall, in due course, have the opportunity of studying a report of the proceedings.

Dr. WATTS: Does that mean that, with the single exception of this country, practically every country in Europe is to be represented?

Mr. LOCKER-LAMPSON: As a matter of fact practically all the questions on Agenda Paper of the Congress are outside the purview of the Home Office, and I would remind my hon. Friend that, now
that we have International Labour Conferences, there is not the same necessity for the Home Office to be represented at this kind of Congress.

Oral Answers to Questions — VENEREAL DISEASE.

Captain WEDGWOOD BENN: 2.
asked the Minister of Health if he will give the number of reported cases of venereal disease in England and Wales, with the total number of attendances at clinics, for each of the years from 1919 to the present time?

The PARLIAMENTARY SECRETARY to the MINISTRY OF HEALTH (Sir Kingsley Wood): As the hon. and gallant Member is no doubt aware, there is no compulsory notification of cases of these diseases, but with permission I will circulate in the OFFICIAL REPORT particulars as to the numbers of cases of venereal disease dealt with for the first time at Treatment Centres in England and Wales during each of the years from 1919 to 1924 and the total number of attendance at the centres during each of those years.

Following are the particulars:


Year.
Number of cases dealt with for the time at Treatment Centres in England and Wales during the year and found to be venereal disease.
Total Number of attendances at Treatment Centres during the year.


1919
82,797
1,002,791


1920
85,531
1,488.514


1921
66,820
1,612,592


1922
56,347
1,560,568


1923
55,945
1,605,617


1924
54,380
1,645,415

Oral Answers to Questions — CROWN SERVANTS (PARLIAMENTARY CANDIDATURE).

Lord BALNIEL: 4.
asked the Chancellor of the Exchequer whether the Report of the Committee on Parliamentary, etc., Candidature of Crown Servants has been considered by the Government; and, if so, what action is proposed thereon?

Mr. GUINNESS: The Government have considered this report and have decided to give effect to the Committee's conclusions so far as they are unanimous. The broad effect of this decision is that, sub-
ject to the exception of certain industrial staffs, there will be the same general rule for all Crown Servants and that this rule will take the form of the existing Civil Service rule under which candidature for Parliament involves resignation from the service.

Oral Answers to Questions — IRON AND STEEL INDUSTRIES (INQUIRY).

Mr. HANNON: 8.
asked the Prime Minister whether he can make any statement in regard to the progress which has been made by the Committee of Inquiry now investigating the condition of the iron and steel industries?

The PRIME MINISTER (Mr. Baldwin): I regret that I am not in a position to make any statement in regard to this investigation.

Mr. HANNON: May I ask whether, in view of the pitiable condition of these industries, any statement will be made during the Recess as to what the policy of the Government may be?

The PRIME MINISTER: I am afraid that I could not answer that question now. We shall go on with our investigations.

Mr. DIXEY: 9.
asked the Prime Minister if he can now say when the Re-port of the Research Committee on the Iron and Steel Trade with be forth coming?

The PRIME MINISTER: The Committee of Civil Research is a Committee of the Cabinet and will make its Report to that body. It would be contrary to established practice to publish the Report of a Cabinet Committee of this kind.

Oral Answers to Questions — CO-PARTNERSHIP AND PROFIT-SHARING.

Mr. ALBERY: 10.
asked the Prim Minister whether he proposes to take an steps in the near future to encourage co partnership and profit-sharing schemes in industry; and whether, in view of the in adequate opportunities afforded in the Session now closing for debate on this subject, he will endeavour to give greater facilities for discussion of this topic in the autumn?

The PRIME MINISTER: I cannot do better than to refer my hon. Friend to the very full reply which I gave on the 25th June on this and kindred matters raised in a question by the hon. Member for Wolverhampton East. I am unable to give in advance any undertaking in regard to allocation of Government time in the Autumn Session.

Oral Answers to Questions — CANAL DEVELOPMENT.

Mr. HANNON: 11.
asked the Minister of Transport whether the Government has yet formulated any scheme for the promotion of canal development in the Midlands or elsewhere; and what measure of support the Government proposes to give towards the development of canal schemes promoted by local authorities and private enterprise, with a view to the relief of unemployment in the forthcoming winter and the development of water transport facilities?

The PARLIAMENTARY SECRETARY to the MINISTRY of TRANSPORT (Lieut.-Colonel Moore-Brabazon): I would refer my hon. Friend to the answer given on the 8th April to the question on the subject asked by the hon. Member for Shoreditch, of which I am sending him a copy.

Mr. HANNON: 12.
asked the Minister of Transport whether he has yet received any report from the Birmingham Town Council on the projected scheme for the enlargement of canal communication between Birmingham and the Mersey; to what extent the Government proposes to assist this scheme in the event of its adoption by the various local authorities concerned; and whether he has had expert advice on the advantage of this scheme to the industries of the area through which the enlarged canal will operate?

Lieut.-Colonel MOORE-BRABAZON: My right hon. Friend has received a report from the Birmingham City Council of a projected scheme for the improvement of canal communication between Birmingham and the Mersey. He has discussed the proposals with those interested in the scheme, and at their request is arranging a further conference with the owners of the various waterways affected. Any such scheme, if it were to be carried out
at present with a view to the relief of unemployment, would be eligible for assistance from the Unemployment Grants Committee if it were approved by them. The scheme has not yet, however, assumed a sufficiently definite form to enable the necessary application for Parliamentary powers to be made, and I cannot at present say whether Government assistance would be available in future in the event of any such scheme receiving the approval of Parliament.

Mr. HANNON: Is the Ministry taking any steps to have a report prepared by its own experts on this project?

Lieut.-Colonel MOORE-BRABAZON: Yes, we do examine these canal schemes, but very few of those put before the Ministry hold water at all. [Laughter.]

Mr. HANNON: This is really not a laughing matter at all; it is a very serious question. In point of fact, is there an expert at the Ministry at all competent to deal with canal questions?

Lieut.-Colonel MOORE-BRABAZON:: Yes, Sir.

Oral Answers to Questions — RETIRED PAY (CAPTAIN A. HARWOOD).

Colonel Sir ARTHUR HOLBROOK: 13.
asked the Secretary of State for War whether he will explain why Captain A. Harwood, Royal Army Medical Corps, who was recalled to the Service on 8th August, 1914, and gazetted to a permanent commission on 12th August. 1914, was, upon retirement on 21st November, 1920, refused assessment of his retired pay under Army Order 324; whether he is aware that, as Captain Harwood was reinstated in the Army, thereby coming under the special exception referred to in paragraph 6 of Army Order 178, of 4th May, 1920, he should be receiving £105 per annum in excess of the retired pay awarded to him under the 1914 Warrant; and whether he will now take steps to adjust Captain Harwood's retired pay accordingly?

The SECRETARY of STATE for WAR (Sir Laming Worthington-Evans): Cap-tan Harwood's claim to retired pay on the scale laid down in Army Order 324 of 1919 has been refused because, owing to a break of more than five years in his service, he has not sufficient service to
qualify under the conditions governing awards on that scale. The special exception, which is made in the Army Order quoted, in favour of officers on retired pay reinstated in the Army does not apply to Captain Harwood's case; he is only entitled to retired pay, by reserved right, under the Warrant of 1914, and I regret that I am not able to increase the award which has been made to him.

Oral Answers to Questions — INDIA (SIKAR ESTATE).

Mr. PETHICK-LAWRENCE: 14.
asked the Under-Secretary of State for India whether he can now state what is the annual revenue of the sub-State of Sikar; how much of this revenue is secured from the land; and what is the amount of money spent annually on public education and public health?

The UNDERSECRETARY of STATE for INDIA (Earl Winterton): It is reported that the average annual receipts of this estate amount to Rs.5½ lakhs, of which land revenue contributes Rs.4 lakhs. The average amounts spent annually on public health and education are stated to be Rs. 20,000 and Rs. 15,000 respectively.

Mr. PETHICK-LAWRENCE: Does not the right hon. and gallant Gentleman consider that the proportion is very small?

Earl WINTERTON: ; I should be glad to answer that question, but it would be unconstitutional for me to do so. The Government of India have no responsibility whatever for the administration of this estate, which is in Indian States territory.

Mr. PETHICK-LAWRENCE: 15.
asked the Under-Secretary of State for India whether he is aware that there has recently been an increase of 25 per cent, in the land tax levied on the peasants in the sub-State of Sikar, and that a number of them who expressed their unwillingness or inability to pay this increased amount were arrested and punished, and what was the nature of the punishment inflicted upon them?

Earl WINTERTON: I am informed that the actual amount levied in land tax depends upon the nature of the season,
but that there has been no change in the method of assessment, and no occasion for arrest or punishment on account of unwillingness or inability to pay. A recent special inquiry showed that the cultivators were in favour of the continuance of the existing method of assessment.

Mr. PETHICK-LAWRENCE: 16.
asked the Under-Secretary of State for India whether he is aware that 18 peasants in the sub-State of Sikar, who had assembled on 5th March for the purpose of proceeding to Jaipur to lay their grievances before the authorities, were arrested without warrant; whether and, if so, how soon any charge was preferred against them in a Court of Law; whether he is aware that two of their leaders were flogged; and whether he has made inquiries into the whole circumstances, and has any statement been made on the matter?

Earl WINTERTON: The only foundation for the statements quoted in the question appears to be that a number of peasants who had been incited by an agitator from outside to defy the authorities, were sent to Sikar as a precautionary measure, but were allowed to return to their homes on giving assurances of good behaviour. I am assured that no one was flogged. The hon. Member is, of course, aware that the Sikar estate is not British territory.

Oral Answers to Questions — FOREIGN OFFICE (COMMERCIAL DEPARTMENT).

Mr. ALBERY: 17.
asked the Secretary of State for Foreign Affairs whether, in view of the importance of foreign trade, he will consider the desirability of introducing into his Department such a measure of reorganisation as will make the commercial side of the service in status at least equal to that of the diplomatic side?

The UNDER-SECRETARY of STATE for FOREIGN AFFAIRS (Mr. Ronald McNeill): I do not think such a reorganisation as the hon. Member suggests is practicable.

Mr. ALBERY: Can the right hon. Gentleman give us some assurance that this question will be considered, in view of the fact that there is no duty of His Majesty's representatives abroad of such importance as that of assisting British trade?

Mr. McNEILL: The question has been very carefully considered already.

Oral Answers to Questions — BRITISH WAR GRAVES, FAUQUISSART.

Mr. LAMB: (by Private Notice) asked the Secretary of State for War whether he is aware of the intention on the part of the War Graves Commission to remove the bodies from the Cemetery at Fauquissart to another spot at Euston Post some considerable distance away, on the alleged ground of existing insanitary conditions, and further, is he aware that the owner of the property has offered to sell the ground to be retained for its present purposes, and definitely states that the question of sanitation has never been raised; and whether in view of the fact that great disquiet is felt on the part of the relatives of those interred at this Cemetery at the prospect of the removal of the bodies after a period of 10 years, and in view, of the result of inquiries made on the spot by responsible persons on behalf of the relatives, he is prepared to take steps to prevent the removal being carried out until further consideration has been given to the matter?

Sir L. WORTHINGTON-EVANS: I regret that it will be necessary to remove the bodies from this cemetery in consequence of a, decision of the local authorities, which the Imperial War Graves Commission are bound to accept. The acquisition of the sites of British War Cemeteries in France under the Law of 1915 is dependent in each case on the consent of the Medical Officer of Health and the Municipal Council of the Commune, and, in the Commune in which the cemetery now in question is situated, these authorities consider it necessary that the number of cemeteries within the area shall be reduced. As the result of prolonged negotiation, in which the Imperial War Graves Commission have received every assistance from the French Government, it has been decided that the nine cemeteries in the Commune shall be reduced to three, and I am satisfied that it would not have been possible to effect any better settlement.

Oral Answers to Questions — BROADCASTING.

COMMITTEE OF INQUIRY.

Sir FRANK MEYER: (by Private Notice) asked the Postmaster-General whether he can state the terms of reference and the composition of the Broadcasting Committee of Inquiry.

The POSTMASTER-GENERAL (Sir William Mitchell-Thomson): Yes, Sir. The terms of reference will be as follow:
To advise as to the proper scope of the broadcasting service and as to the management, control and finance thereof after the expiry of the existing licence on 31st December, 1926. The Committee will indicate what changes in the law, if any, are desirable in the interests of the broadcasting service.

The Committee will be constituted as follows:—

Earl of Crawford and Balcarres, K.T., P.C. (Chairman).
Lord Rayleigh, F.R.S.
Lord Blanesburgh, G.B.E.
The right hon. Gentleman the Member for Ross and Cromarty (Mr. Macpherson).
The right hon. Gentleman the Member for Central Edinburgh (Mr. William Graham).
Sir Thomas Royden, Bart,, C.H.
Dame Meriel Talbot, D.B.E.
Sir Henry Hadow, C.B.E.
The hon. and gallant Member for North St. Pancras (Captain Ian Eraser).
Rudyard Kipling, Esq.
W. E. Weston, Esq., of the General Post Office (Secretary).

It is expected that the Committee will commence their sittings during the month of November.

Colonel DAY: Will the Committee also consider a reduction of the fees charged to the crystal licence holders.

Sir W. MITCHELL-THOMSON: That, I think, would come under the word "finance."

Oral Answers to Questions — SUMMER ADJOURNMENT.

Resolved,
That this House, at its rising this day, do adjourn till Monday, 16th November."—[The Prime Minister.]

BUSINESS OF THE HOUSE.

Motion made, and Question proposed,
That the Proceedings on Government Business be not interrupted at this day's Sitting at Four or half-past Four of the clock, and may be entered upon at any hour although opposed; that at Three of the Clock, unless previously concluded, Mr. Speaker shall put every Question necessary to conclude the Proceedings on the Consolidated Fund (Appropriation) Bill; and that at half-past Seven of the clock, unless previously adjourned, Mr. Speaker shall adjourn the House without Question put. provided that he shall have then reported the Royal Assent to the Consolidated Fund (Appropriation) Bill."—[The Prime Minister.]

Captain BENN: I think this Motion deserves a word of comment, as I think it is the first time a Government has ever introduced the Guillotine on the Appropriation Bill. The Committee stage of the Bill and the Report and Third Reading are being taking in one day under the Guillotine. I merely make that comment because it is appropriate to the muddled condition of public business and the hurried way in which the holiday feeling is being exploited in order to push on business, without any regard to Parliamentary decency or public good.

The PRIME MINISTER (Mr. Baldwin): As my hon. and gallant Friend has thought fit to make one comment, I will just add one comment to his. I cannot think that he is unaware that these arrangements have been come to by general agreement and for the general convenience of all Members of the House.

Question put, and agreed to.

Mr. SNOWDEN: May I ask the Prime Minister what business will be taken when the House resumes in the autumn?

The PRIME MINISTER: On Monday, 16th November: the Expiring Laws Bill, Second Reading; Criminal Justice Bill, Report and Third Reading, and the Second Readings of the following Bills. Married Women (Torts) [Lords]; Wild Birds Protection; Coastguard [Lords]; Forestry; Legitimacy [Lords], and other Orders.
On Tuesday, 17th November: Expiring Laws Bill, Committee; Public Health (Scotland) Amendment Bill, Report and Third Reading; and the Second Readings
of the following Bills—Education (Scotland); Circuit Courts and Criminal Procedure (Scotland) [Lords]; Sheriff Courts and Legal Officers (Scotland); Roads and Streets in Police Burghs (Scotland), and other Orders.
On Wednesday, 18th November: Tithe Bill, Report and Third Reading, and other Orders.
The business for Thursday and Friday will be announced when we resume in the autumn.
On Monday, 16th November, I shall move the usual Motion to take the time of the House for Government business.

Orders of the Day — SUPPLY.

REPORT [6TH AUGUST.]

Resolution reported,

CIVIL SERVICES SUPPLEMENTARY ESTIMATE, 1925–26.

UNCLASSIFIED SERVICE.

"That a sum, not exceeding £10,000,000, be granted to His Majesty, to defray the Charge which will come in course of payment during the year ending on the 31st day of March, 1926, for a Subvention in Aid of Wages in the Coal Mining Industry."

Motion made, and Question proposed, "That this House doth agree with the Committee. in the said Resolution."

Mr. SAKLATVALA: I will not detain the House for any considerable time, but I wish to submit two observations to the Prime Minister in connection with this Vote, as I had not an opportunity of doing so earlier. The Minority and Communist movement, of which there was so much talk yesterday, candidly take lit that the position which has arisen is not due to the breakdown of the coal trade but to the breakdown of coal wages, and I appeal to the Prime Minister when he is appointing the Commission of Inquiry, to include in that inquiry the most important factor which is breaking down British wages, namely the state of the coal industry in other parts of the British Empire where British masters are employing labour at 4s. per week, and raising coal at the pit's mouth at 3s. 6d. to 6s. per ton. I submit that if the mine owners in Great Britain can be legitimately, constitutionally and Parliamentarily called upon to refrain from making higher profits than 1s. 3d. per ton for the benefit of the wage earners, it is of the highest necessity that the same law should be applied to all British mine owners in South Africa, Southern China, and India, so that the mining wages in those areas of the British Empire do not break down to a minimum and then, as its reactionary effect, the wages in Great Britain also suffer.
The other brief observation that I wish to offer is the point of view of the Minority Movement. I do not for a moment wish to stand up in false defence of the minority Communist movement, but I accept some part of the views
expressed by the Prime Minister himself, and I think it is fair that the country should know what the real position is, rather than indulge in a party wrangle over this Minority Movement. I would draw the attention of the Prime Minister to the most excellent speech which was delivered yesterday by the right hon. Member for Platting (Mr. Clynes), in which he said that the miners would have been craven cowards had they not resisted the owner's attack, and that the rest of the workers would not have been comrades had they not stood by them. I think that, analysing this sentence, the Prime Minister should understand—and this is the minority point of view—that we do not accept this inquiry now to be launched as an inquiry that may produce reasons justifying a reduction of the miners' wages. If the miners would have been craven cowards last week to accept a reduction of wages, we of the Minority Movement would get up a propaganda to the effect that they would be worse than craven cowards to accept a reduction of wages after the findings of even a hundred committees appointed by this Parliament.
It is perfectly obvious—and the right hon. Member for Platting pointed out very clearly and very rightly—that at the present moment the miners, as well as the other workers who stood as comrades by them, take the position that this is a great campaign to break down the wages of the working classes, and if it were not for that the leaders of the older trade union committees would not have led the men to fight. That is exactly the position which the Minority Movement takes up. The right hon. Member for Platting was correct in his observations. It is the propaganda in the factory sheets issued by the Minority Movement that creates this psychology. It is determined to do so continually, so that the men should begin to believe that they must take direct action and ignore Parliament, which ignored the findings of the Sankey Commission, and treat it with the same contempt as Parliament has treated the miners on the question of nationalisation of mines. That will be the propaganda of the Minority Movement in the coming weeks, quite openly and candidly, and I submit that, while the right hon. Member for Platting was right—and I believe the criticism of the Prime Minister and the Chancellor of the Exchequer and other critics was equally right—the mass
psychology which forced the leaders of the trade union movement to come to the conclusion that a fight was inevitable was created by the Minority Movement, through factory sheets, through propaganda, and through working within, the trade union movement.
The right hon. Member for Derby (Mr. Thomas), in his speech, also mentioned that the railway workers stood up, not because they wanted to overthrow the constitution of this country, but because they felt also a spirit of comradeship in face of the common danger. I submit that the same situation existed in 1921. The right hon. Member for Derby in 1921 was in a position, in spite of some idea among the railway men that the miners' fight must be made their own fight, and was able to change the whole situation and to draw the railway men away from the fight. In the year 1925 the right hon. Member for Derby, owing to the propaganda of the Minority Movement, has had to let his railway men be led into the fight us a just and a right fight. I submit these observations to the Prime Minister because I do not want the country and the House to take an exaggerated view of the influence of the Minority Movement. At the same time, it is deplorable that anybody on this side should hoodwink the country as if the Minority Movement and propaganda, did not exist at all.
When this investigation and inquiry is coming on, the right hon. Gentleman should bear in mind that the same influences which at the present moment have brought about a mass psychology of the mining workers, the railway workers, and the engineers will continue to operate. Let the House and the country be under no delusion that we are going to accept this investigation as an investigation to find out whether or not the wages should be cut. We take it only in the spirit that the wages cannot, should not, and will not be permitted to be cut. The investigation should rest entirely upon the factor of finding the ways and means of giving to the hard-working miners, a legitimate, decent liveliho0d. Then I submit to the Prime Minister that no amount of quibbling on gold standards or on Communist propaganda against the respective leaders of the trade union movement will contribute to that result. The only thing that will stop the
gradual driving down of the British standard of life and wages is the stoppage of the exploitation of rival Asiatic, African, and Chinese labour against the standards of British labour.
If this House is proud of its political and constitutional traditions, we of the Minority Movement submit that the trade union movement of this country should be equally proud of its own traditions. It has had the same amount of labour, trouble, and anxiety, fighting and struggling to build up a certain standard of life for the British citizens who are workers—and they are the majority of the population. If hon. and right hon. Members opposite are prepared to put up a deadly fight if we subvert Parliamentary traditions, then we say to them that the workers of this country will also be prepared—and we shall mobilise and organise them to be prepared—to offer to you the same deadly fight, if you take measures in your Empire by which to subvert the standard of life of British workers, which they have built up with much greater trouble and sacrifice than you have built up your traditions. If we all go forward in this inquiry and investigation with a candid and frank acceptance of the position, we shall bring about very good results, otherwise the whole thing will only be putting off the fight till another day and on a larger scale.

Mr. BROMLEY: I know it should almost call forth an apology to the House, on this last day, for any of us to take time which otherwise is required for other subjects, and I would almost feel in that spirit; but I want also to appeal—and I use the word "appeal" in its fullest sense—to the Prime Minister and the Government to bring what influence they can—I hope as fearlessly as the Prime Minister did in settling the mining dispute — in this coming inquiry, to try to avoid that which, I may say respectfully but firmly, threats from the Government Benches will not wipe away. I want us to face facts, and hence I make this appeal for the fullest possible inquiry into the mining difficulties. Hard things were said during the Debate yesterday against the trade union movement. I was one who took some part—a very small part, I admit—in helping to bring the trade union movement behind the miners. I
do not apologise for it, because at the close of nine months I should do it again, and no amount of threatening would have the slightest effect. Some of us realise with very great regret what we might be up against. I am one who does not believe that all our Air Force in built for France. I realise there may be other reasons. I realise the great potentialities of trade unionism trying its strength against capitalism. It is not a challenge to this Parliament. If I believe in trying to overthrow the Legislative Assembly by our action, I should not be here appealing to my fellow-countrymen for justice for the people whom I endeavour to represent.
We hear and read appeals to us, and threats to us, to reduce the standard of life of the working people as represented by our trade unions for the purpose of assisting the country, and when we object to that, it is suggested we are unpatriotic and have no thought or love for our country. Speaking for myself, I have tremendous faith in my fellow-men, even some of those to whom I am opposed politically. We would say to the Prime Minister and this very powerful Government, if you ask us to do this, when everyone else has made sacrifices, I would be one of the first to advise my people to go down to the mines. But realising the pleasures, the luxuries, realising what is going on in spending the wealth created by the nation, I say this settlement is not a victory for us. I voted against it last night on principle, which I am prepared to explain to the constituents I represent or to the trade unions generally. It is not a victory. What really happened was this: The mine workers are already worse off than they were before the War, their wages being only 47 points higher as against 73 points in the cost of living, and we only stood out f r their not going further back. What the Government have done is to take public money to give profits to the shareholders and the owners of mines. That is no victory for us at all. It is again a victory for capitalism, which can always beat us so long as we are prepared to accept.
I repeat, if others would make sacrifices and the working trade unionists were the only people who were taking something more than that to which they were entitled, I would agree very willingly that
they should be compelled to be reduced. But may I point out that within the last few years, I believe from 1912 to 1918, the mineowners took something like—I am speaking from memory, but I think I am about correct—£160,000,000 in profits, whereas at the Royal Commission it was stated shortly after that the value of the whole British minefield was only £130,000,000. Then, again, we had records, especially in the South Wales coal field, of two shares being given for one in some cases, and in others one in five, two in five, and so forth, on which profits have to be paid by the working miners. That means that the action of the Government—and I will explain in a moment, very briefly, why I think there was no other way out in the circumstances —is equivalent to saying to the people of this country, "We will not have nationalisation when there are profits made out of an industry, because the profits will go to the private enterprise, but when there is a loss, we will immediately nationalise to the extent that your money is taken to keep up the profits of the owners." That is one reason why I voted against subsidising the profits of the people who had already had in profits more than the value of the whole undertaking in six years.
I consider that a defeat, not only for the working people of this country, but for trade unionism generally. Then there is the vast amount, about £6,500,000 per annum, of mining royalties. I know immediately it could not be done, but I suggest to the Prime Minister and the Government that there should be serious thought taken in this inquiry as to whether that £6,500,000 should not be taken, rather than saddle £10,000,000, or possibly £20,000,000, on the ordinary taxpayers of the country to keep up the profits of the mineowners. We were threatened by the Prime Minister, the right hon. Member for Carnarvon Boroughs (Mr. Lloyd George) and the Chancellor of the Exchequer as to what would happen if ever we dared to stand by our fellows again. I, for one, will stand by the miners again at the end of the nine months, and will endeavour to bring them every possible power behind them, and, if trouble comes, I shall blame the Government, and not the trade unionists who stand by their fellows.
Let me briefly sum it up. Here we see a riot of extravagance and waste.
We have seen the great race meetings and the yacht regattas, and very shortly there will be a great to-do in shooting half-tamed birds. While all this goes on, and the royalties still stand, to say nothing of the wayleaves, while profits are to be kept up, yet because working-people stand by their fellows who are threatened with a crushing down which would have meant only about 15 points on their wages, when the cost of living is 73 points above the prewar level, it is said that it is a challenge to Parliament. It is a challenge to capitalism, making it ashamed in all its brutality. I believe one of the great mining royalty-owners is a very great expert on horse-racing and boxing. What does he know about getting coal? When the nation is to be held to ransom by people who create nothing, and when we stand with our working-people who suffer we are. threatened. It might be exceedingly regrettable, and none would regret it more than some of us on these benches. We want peace, happiness, comfort and justice, and justice is the supreme consideration of them all.
I would appeal again to the Prime Minister to let this inquiry be as full, as fair and as frank as possible, and, not only that but that he will use his influence to press it into the dark corners and the secret recesses of this industry, to look at it on a broad basis. Then, if it be proved on the profits of the owners, on the mining royalties, on wayleaves, on watered capital, which has never been actually contributed in money, except that earned by the miners themselves and transferred from reserve to new capital if they will do that, and prove that there is nothing for it but for the miners to stand their share, I know from the sacrifices of miners, when they could have bled the country in time of War, and did not, but agreed on their suggestion to the price of coal being kept down, I say they will be prepared to reconsider their position, and so will the trade union movement. Without desiring to be defiant at all, or strike other than the note on which we pride ourselves is a British note, if at the end of the time the miners are told "You are the only people to suffer," no personal discomfort will prevent some of us will-nilly standing by our people, not only because we think we are standing by trade unionists and the miners of the country, but that we are standing
by the great nation as a whole against those who are exploiting the sufferings of so many of its people.
We were told that if we dared to call a strike, our people would suffer. I know they would, but they are brave and big enough to stand suffering. Supposing the miners had been broken down by the Government and by the mine-owners, that the matter had not been settled and their wages would have been brought down below the cost of living. What about the long years of suffering for themselves and their children? What chances would have followed for human beings and for the future of this great nation, a nation we are all proud of, with all its faults, a nation that I want to see purified, and Christianised, and if I may use the word—glorified? That is our only aim. If you had beaten down the wages of the workpeople, there would have been many many years of suffering for them and their children. Put that in the scale. All that would have followed a strike. We stand for justice and against that which causes suffering. I appeal to the Prime Minister and to the Government not to force us at the end of the nine months to take up a hostile attitude, because by that time we shall have proved to the country that we have no desire to challenge, no desire to pull down our nation, but to lift it up to more cleanliness, more purity, and more justice for the people of this great country.

Mr. PURCELL: I would wish to say a word of congratulation to the Prime Minister for what I regard as a very useful contribution to the organisation of the working classes of this country. I think he has been a far better organiser of the trade union people in this country than one could have ever thought. The methods employed during the negotiations, so far as we could gather from those who were within the circle, were such that we are pleased to know that there was a feeling that should there be a reduction in the miners' wages it was inevitable that the other workers would have to suffer too. If then, there was a call, it was a call to organise. I belong to a school which, I think, has a very large following in these days—I believe it is a very good school indeed—and the idea of solidarity amongst the workers could certainly not have had a better aid than recent moves. I want,
however, to say a word or two in regard to another point, and an important point. You may go on clipping the benefits of the workers under Insurance schemes; you may go on attacking these workpeople by reducing their benefits and making it more difficult for them; you may, in addition to that, eliminate a large number of the young people from benefits, and you may in many cases disqualify the miners and others, in your attempts to modify their attacks upon what we may call the preserves of capitalism. You may do that, but do not forget what is happening; do not forget the result.
These people are becoming more and more active against the forces of law, and are more and more becoming opposed to the present social order. I hope that, when you are considering these questions at the inquiry, you will include everything necessary in such a way that those inquiring will have regard to the vast army of young people who, anticipating to go to work in the mines, have now reached the age of 18 and have not even started work. That is a terrible blot upon capitalism. You may do all that you please in disqualifying these people from the benefits to which they are entitled, but when you do it in the long run so far as they are concerned it is only to make them active against you. In addition to what I have stated, you are continuing the process by reducing the means that will enable these young people to have a better education and to live under a better system than is theirs at the present time. For that reason I think that the greatest mistake of all will have been made if you do not include within the scope of your inquiry all the ramifications of these things that tend to cause the existing difficulties.
Further than that, I want to say that in the threats—and I think they are threats—that we read in the speeches of last night, so far as I can see, attempt is to be made to organise the forces of the Crown for the purpose of preventing trade unionists taking similar steps to those they anticipated taking. If that is a challenge to the trade union movement, I want to warn the right hon. Gentleman and, in fact, every Member of the House that if you throw that challenge to us now, you will encourage us more than ever to get together as speedily as possible and make up our minds as to our
course of action. For whatever happens then, we will not be responsible. Do not forget this: that though we are for peace and you encourage us in the way I say, whatever happens afterwards you will not be able to complain about. You cannot complain about the Minority Movement, the Communist movement and others, if in return for what has been said we set ourseive3 to the task of organising our own supplies.
There is something more, it may be, in the question of aircraft organisation, as my hon. Friend the Member for Barrow-in-Furness (Mr. Bromley) has reminded the House than is generally assumed. It should not be forgotten that there may be, even amongst the Air Force Members, many who think it necessary that there should be a change in the organisation of society. You must not forget that the men who came back from the War are amongst the most energetic and active men in desiring a change in the present order of society. Hon. Members must not forget that from these quarters we are creating a contribution to the forces of disorder. We shall not for one moment flinch in these matters from doing our duty to our own class, as others do not apparently shrink from doing their duty to their class, in order to see that our class is well protected and guarded. When you are considering the various means that you propose to call in to protect yourselves against our organisation, I ask you to remember the effect of what has been done by the workers of other countries. I ask you to remember that during the last few days the effect of this movement from the trade union point of view in every part of the world, particularly in France, Germany, Belgium has been to encourage the workmen to stand firm against reductions in wages. In that sense, therefore, our men have made a better contribution to level competition than any other scheme that has been presented by anyone in or out of this House. That is our contribution to that international unity that is so frequently scoffed at. We ought to extend it in such a way as will recognise that wherever capitalism is in this world it is the same so far as the workpeople are concerned. The effect of it so far as the workers are concerned is exactly the same. I do not think any one of us can regard with anything but utter shame the condition of things in China.
and even in India. We cannot conceive anything worse for ourselves than the conditions that exist there at the present time. But I want to go back for a moment to the threat. I think it most unfortunate that this threat should have been made in the manner it was, and therefore that we should desire to be perfectly clear, and I want our friends and everybody to be perfectly clear, when I say for the trade union movement that these things will in no sense deter us from proceeding with our organisation to at least demand and secure equal conditions everywhere that we think are ours by right and not at all by privilege.

12 N.

Mr. MAXTON: I know that hon. Members wish to get on to other business, but it seems to me to be a pity to leave a subject in which the whole country, and probably the whole world is interested in order to pass on to subjects which are of lesser immediate interest. I will not detain the House for more than two minutes. In dealing with this matter yesterday both the Prime Minister and the Chancellor of the Exchequer presented to the House and to the country the view that on the Thursday night when negotiations were going on, the Government were faced with only two possible courses, either that of entering into a tremendous industrial strugggle, not merely against the miners but against the whole of the organised trade unionists of this country, or of paying up in the form of a subsidy, as the House is agreeing to do to-day. Those were not the alternatives. That was an untrue picture of the situation. The third alternative was the obvious and the right one, and was the alternative which would have been adopted by a Government who were not completely blinded by interest in their own class. This alternative was the coercion of a few hundreds of mine owners in this country. Yesterday the attitude of the organised trade unions was referred to as the attempt of a small minority to coerce the whole community. That, again, is an untrue statement of the position. The reason the Government were unprepared to attack them was because they knew that it was no negligible minority, but was a majority of the working-class population of this nation. These organised workers were asking for one simple thing namely, that the employers should
withdraw their notices. That was all the working classes were asking. The Government could easily have coerced those few thousands of men, or hundreds of men, who have brought this industry to the state in which it is just now—by excessive greed in the prosperous years they are unable to meet lean years. The Government could easily have coerced them, they had legislative power and statutory power to coerce them, but because they belonged to their own class they said, "No, we dare not." These organised trade unionists had the support on this particular issue of millions of other workers who were unorganised but yet held the view that this was a tyrannical and despotic attempt on the part of the mine owners to carry out what was the declared policy of the Prime Minister and other members of the Government, namely, to make a serious inroad into the working conditions of the working class population. I am quoting here from speeches made by the Prime Minister and by the Home Secretary, two representative members of the party opposite. The Prime Minister said on 30th July:
All the workers of this country will have to take reductions in wages to help to put industry on its feet.
The Prime Minister said that on 30th July, 1925. [HON. MEMBERS: "Where?"] In reply to the deputation from the Trade Union Congress that visited him here. It is reported in the "Daily Herald." HON. MEMBERS: "Oh!"].

The PARLIAMENTARY SECRETARY to the TREASURY (Commander Eyres-Monsell): May I ask whether any shorthand writer was present?

Mr. MAXTON: It was reported in the "Daily Herald." [HON. MEMBERS: "Oh!"] Just take your time. If this is untrue, you will have any number of opportunities of answering it. I am giving you my authority, the "Daily Herald," that is the Labour paper, of 31st July, 1925. Let us hear you in chorus challenge the next:
In order to compete with the world, either the conditions of labour, hours or wages will have to be altered in this country.
That is a statement by Sir William Joynson-Hicks, Home Secretary, reported in the "Glasgow Herald," a responsible organ of the Conservative Party on 3rd August, 1925. In the middle of the dis-
pute, when public feeling was at its height and the working classes of this country were looking to the Government to hold the balance evenly between the two contesting sides, we find this Government, who are not going to be coerced by a minority, taking the side of the employers of labour against the majority of the working class, the whole of the working class, because this does not refer to one section or another. His statement was:
In order to compete with the world, either the conditions of labour, hours or wages will have to be altered in this country.
I shall be glad to hear that either of these quotations is an unfair presentation of the views of the two right hon. Gentlemen. I have occasionally been misrepresented and misquoted myself, and I do not want to be unfair. But while they have been saying these things, what have they done? They gave £10,000,000 in relief of the super-tax payers; but in order to compete successfully with the world, the wages, hours and conditions of the workers, who are already on the starvation level, have got to come down. £32,000,000 was given in relief of the Income Tax payers. The average man who is paying Income Tax, even on the minimum level, is a man who is living in ease compared with the working classes. The Government are spending £58.000,000 on extra cruisers; they have decided to spend up to £11,000,000 on a new naval base at Singapore; and yet it is said that in order to save the nation working class conditions have got to come still lower. That is their considered view. The ordinary working people of this country were justified in believing that this Government would have stood idly by and have seen the miners, standing alone, ground down to the bottom. That was what they were waiting for. That was why there was delay—because they believed they would have the miners isolated and would have crushed them in isolation. Only when the big mass of the organised workers stood behind them in protest did they begin to think that it was necessary to come in and conciliate and find a way out. I put it that it was the definite duty of this Government to use the powers they had to coerce these few hundred mine owners, saying to them, "You can-
not be allowed to hold this nation by the throat as you are doing. You mine owners have either got to withdraw your notices and carry on, or we, the government of this country, elected by the working people—and you have told us many times that you are elected by the working people—are going to see that the interests of the mass of the common people are attended to, and if you will not run the pits, we will run the pits for you". That was the obvious, bounden duty of the Government, and it was mere class prejudice and the desire to carry on the class war that made the Government take the line they did.

Mr. GROTRIAN: After this fiery outburst, may we have a window open?

Question, "That this House doth agree with the Committee in the said Resolution", put, and agreed to.

Orders of the Day — WAYS AND MEANS [6th August].

Resolution reported,
That, towards making good the Supply granted to His Majesty for the service of the year ending on the 31st day of March, 1926 the sum of £10,000,000 be granted out of the Consolidated Fund of the United Kingdom.

Motion made, and Question proposed. "That this House doth agree with the Committee in the said Resolution".

Captain WEDGWOOD BENN: I wish to ask a question, a vital question, of the Financial Secretary to the Treasury or the Chancellor of the Exchequer. How is this money going to be found? We ought to have an answer to that question.

Mr. SPEAKER: This motion does not give an opening for a debate on that subject This Resolution merely authorises the drawing of the cheque on the Consolidated Fund which was sanctioned a moment ago.

Captain BENN: In supply we cannot raise the question of how the money is to found. We could not raise it on the last Resolution, and we cannot raise it on the Appropriation Bill, because that does not deal with the raising of money but with the granting of money, and I submit that I ought to be permitted to put what is a vital question. £10,000,000 has got to be found, and there must be some Parlia-
mentary opportunity of asking just briefly whether that money is to be found by taxes or loans or making fund, or how it is to be found.

Mr. SPEAKER: It cannot possibly be done on this Ways and Means Resolution.

Captain BENN: Is there some Parliamentary procedure by which vast sums of money can he taken without any member of Parliament having an opportunity of asking how the money is to be raised?

Mr. SPEAKER: I do not think it would be out of Order to ask that question on the Third Reading of the Consolidated Fund Bill.

Question put, and agreed to.

Ordered, "That it be an Instruction to the Committee on the Consolidated Fund (Appropriation) Bill, that they have power to make provision therein pursuant to the said Resolution."—[Mr. Guinness.]

Orders of the Day — CONSOLIDATED FUND (APPROPRIATION) BILL

Considered in Committee.

[Mr. RAWLINSON in the Chair.]

CLAUSE l.—(Issue of £244,772,058 out of the Consolidated Fund.)

Amendment proposed: "In page 1, line 19, to leave out the word "forty-four" and to insert instead thereof the word "fifty-four."—[Mr. Guinness.]

Captain BENN: The object of this Amendment is to authorise an increase of the appropriation by £10,000,000. Am I in Order at this stage in asking—I note the absence of the Chancellor of the Exchequer, which seems to be somewhat surprising on so important a Vote, but I am satisfied with the authority and the ability and the efficiency of the Financial Secretary to the Treasury in asking how it is proposed to raise the £10,000,000. Is it to come from tea or beer or sugar?

The TEMPORARY-CHAIRMAN: That cannot possibly be in order on the Committee stage of this Bill.

Amendment agreed to.

Clause, as amended, ordered to stand part of the Bill.

CLAUSE 2.—(Power for the Treasury to borrow.)

Amendment made: In page 2, line 5, leave out the word "forty-four" and insert instead thereof the word "fifty-four."—[Air. Guinness.]

Clause, as amended, ordered to stand part of the Bill.

CLAUSE 3.—(Appropriation of sums voted for supply services.)

Amendment made: in page 2, line 30, leave out the word "sixteen" and insert instead thereof the word "twenty-six." —[Mr. Guinness.]

Clause, as amended, ordered to stand part of the Bill.

CLAUSES 4.— (Treasury may, in certain cases of exigency, authorise expenditure unprovided for; provided that the aggregate, grants for the navy services and for the air services respectively be not exceeded.) 5.— (Sanction for navy and air expenditure for 1923–1294 unprovided for.) 6.—(Declaration required in certain cases before receipt of sum appropriated) and 7.—(Short title) ordered to stand part of the Bill.

SCHEDULE (A).

Amendment made: In page 5, line 6, leave out "£416,223,485 0s. 0d.," and insert "£426,223,485 0s. 0d." —[Mr. Guinness.]

Schedule, as amended, agreed to.

SCHEDULE (B) (Appropriation of Grants).

Amendment proposed: In page 6, line 12, leave out "£3,141,228 0s. 0d." and insert instead thereof "£13,141,228 0s. 0d." —[Mr. Guinness.]

Mr. JOHNSTON: Am I in Order at this point in objecting to the description "subvention in aid of wages in the coalmining industry" on the ground that it is a misdescription?

The TEMPORARY-CHAIRMAN: It would not be in Order at this stage.

Amendment agreed to.

Further Amendments made:

In page 6, line 13, leave out "£223,224,413 0s. 0d." and insert instead thereof "£233.224,413 Os. 0d."

Page 6, line 17. Leave out "£416,223,485 0s. 0d." and insert instead thereof "£426,233,485 Os. 0d."—[Mr. Guinness.]

Schedule, as amended, agreed to.

SCHEDULE (A) (Grants out of the Consolidated Fund).

Amendments made:

In page 6, line 26, leave out "£244,772,058 Os. 0d." and insert instead thereof "£254,772,058 Os. 0d."

In page 6, line 27, leave out "£416,223,485 Os. 0d." and insert instead thereof "£426,223,485 Os. 0d."—[Mr. Guinness.]

Schedule, as amended, agreed to.

SCHEDULE (B), Part 13, (Unclassified Services).

Amendment proposed: In page 41, line 22, at the end insert the words:
9. For a subvention in aid of wages in the coalmining industry … £10,000,000." —[Mr. Guinness.]

Mr. JOHNSTON: Am I in Order at this point in drawing attention to the misdescription of the purpose for which this £10,000,000 is asked. The description is
for n subvention in aid of wages in the coalmining industry … £10,000,000.
It is notorious to every Member of the Committee—

The CHAIRMAN (Mr. James Hope): That is not in Order. This has been passed in Committee of Supply and it might well have been argued yesterday that it was a misdescription, but under the Appropriation Bill the consideration of the matter referred to by the hon. Member cannot arise.

Mr. JOHNSTON: It was argued yesterday. Objection was taken by the Leader of the Opposition and by other Members to this description and this is the first time that we have had a definite opportunity of challenging these words.

The CHAIRMAN: It has been ruled over and over again that in Committee on the Appropriation Bill we cannot go into matters which are appropriate to Committee of Supply. This Vote of £10,000,000 was passed yesterday and the Report of it, I understand, was passed to-day, and it was passed as a subvention of £10,000,000 for the coalmining in-
dustry. The only question that can possibly arise now is whether £10,000,000 is a misprint and whether it should not be £11,000,000 or £9,000,000. That could be argued by the hon. Member but as the Vote has been passed by Committee of Supply the matter cannot be argued again now.

Mr. JOHNSTON: With great respect, may I draw attention to the fact that we are not opposing the phraseology "for the coalmining industry." What we are objecting to are the words "in aid of wages."

The CHAIRMAN: The Vote was passed yesterday under that description and therefore the matter cannot be argued now.

Captain BENN: Would it be in Order to ask what Department is going to administer this money? By what machinery will it be done or under what control? Surely we are entitled to know this.

The CHAIRMAN: Those things were perfectly relevant on the Report stage of the Resolution, but they are not appropriate on the Appropriation Bill.

Major CRAWFURD: If on any other occasion a sum of money is voted in this House and the description of the purpose for which it is voted is found afterwards by common consent and not disputed by any party to be inaccurate, would it not be possible then for this House to amend the description?

The CHAIRMAN: Not on the Appropriation Bill. I have some knowledge of the procedure on the Appropriation Bill because the Prime Minister of Northern Ireland and I repeatedly attempted discussion in the Committee but we were unable to get very far.

Mr. OLIVER: Under this form of words would it be possible for any part of the money to be attributed to profit?

The CHAIRMAN: This is only a recital of what was done in Committee of Supply and Report of Supply.

Mr. JOHNSTON: If this House passes this Schedule B with the £10,000,000 described as "a subvention in aid of wages in the coalmining industry" and it is subsequently discovered that any part of this £10,000,000 has been given
as a subvention to profits, will this House have any remedy against the Treasury or the Chancellor of the Exchequer?

The CHAIRMAN: The matter will come before the Public Accounts Committee, which will make its Reports.

Mr. W. THORNE: Will it be possible to raise the question on the Third Reading of the Bill?

The CHAIRMAN: Yes, certainly.

Question, "That those words be there inserted" put, and agreed to.

Further Amendment made: In page 41, line 24. leave out "£3,141,228" and insert instead thereof "£13,141,228."— [Mr. Guinness.]

Schedule, as amended, agreed to.

Remaining Schedules agreed to.

Bill reported: as amended, considered.

Motion made, and Question proposed "That the Bill be now read the Third time."

Orders of the Day — NATIONAL EXPENDITURE.

Sir GODFREY COLLINS: It seems right to my colleagues and myself that on the closing day of the Session, we should devote some attention to the problem of national expenditure. My right hon. Friend the Member for Carnarvon Boroughs (Mr. Lloyd George) had intended to interrogate the Government this afternoon on the subject, but a long standing previous engagement in Wales prevents him being present here to-day. In his absence I am anxious in a very few minutes to direct the attention of the Government to this very important matter. In the first place, I may remind the Government of their policy on this question. On the opening day of the Session, as far back as 9th December last, in the Gracious Speech from the Throne I find the following words:
The present heavy burdens of the taxpayers are a hindrance to the revival of enterprise and employment. Economy in every sphere is imperative.
Rather striking words in view of the action of the Government during the last nine months
if we are to regain our industrial and commercial supremacy.
We are at the end of the Session, and, with that statement of policy what has
happened during the intervening months? In March last we had estimates presented by the Chancellor of the Exchequer which made provision for some £5,000,000 or £7,000,000 for the fighting services of the Crown. The Chancellor of the Exchequer then explained to the House that he had not had sufficient time to analyse the expenditure, but in his Budget speech he expressed the hope that during the coming year he would be able to reduce the rate of national expenditure by some £10,000,000 each year. In the following month, I think, he announced to the House that the Government were about to set up a Standing Committee of the Cabinet, for the purpose, he said, of. overhauling blocks of recurrent expenditure in addition to the annual scrutiny-made by the Treasury. I think that I am right in stating that this Committee has not yet been constituted.

The CHANCELLOR of the EXCHEQUER (Mr. Churchill): It has.

Sir G. COLLINS: Then the Chancellor of the Exchequer finding the pressure of the spending departments being applied from day to day spoke in July last and expressed the fear that the reduction of £10,000,000 this year, and in the coming years, might not mature, and he told the country that he found great difficulty in curtailing the expenditure as he had anticipated. Then during the last few weeks the House has been told that the Government are going to set up an outside committee to overhaul national expenditure. I hope that, before the debate closes, that the Chancellor may announce the terms of references to this Committee and its personnel. What Has happened since the Chancellor took office in December last? He has increased the current expenditure of the nation. He has invited the country to find a sum of some £58,000,000 for cruisers.

Mr. CHURCHILL: Over five years.

Sir G. COLLINS: And the sum of £11,000,000 for Singapore over another period of years. He invited the House yesterday to find a sum varying from £10,000,000 to £20,000,000 towards subsidising not only the wages of miners but also the profits of the coal masters and the royalty owners over a period of nine
months in this case. That is the record of the Chancellor of the Exchequer during the short nine months of his Office. These are the various services for which the House of Commons in its wisdom has made provision. When the right hon. Gentleman took office, I was hopeful that with his experience at the Admiralty and the War Office, with his knowledge of these great departments, and with his restless energy and driving force the public purse would benefit, but I am bound to say that up to the present moment he has been beaten by these Departments. He has lost the first round in the 6truggle, and our object this afternoon, if I may say so with sincerity, is to assist him during the coming months in the struggles which he will be forced to face with the spending Departments of the State. Let me direct the attention of the right hon. Gentleman where I think very large economy can be effected. I will submit my reasons, and I hope that they will convince him of their wisdom. Let me remind the House in the first place that the Estimates for the Fighting Forces of the Crown in the year 1914 amounted to £80,000,000, whereas the present estimated expenditure is some £120,000,000.

Mr. CHURCHILL: Are you making allowance for the difference in the value of money?

Sir G. COLLINS: I will come to that. The numbers of the Fighting Forces for the year 1914 were 320,000; this year the right hon. Gentleman is making provision for 282,000 men; in other words, for every 100 men in the Fighting Forces of the Crown that were thought necessary in the year 1914 the Chancellor of the Exchequer to-day thinks that 88 are required. Surely a 12 per cent, reduction in the Fighting Forces of the Crown, in view of the tragedy of the last 10 years, is utterly inadequate. It has been so often said in this House that one hardly dares to repeat that the German menace has disappeared, but the only people who appear to have forgotten that fact are the Admiralty themselves. They appear to have forgotten that the German menace has been removed. The Chancellor of the Exchequer, if he turne3 to the Navy Estimates, could make wide and radical and sweeping reductions without any
grave loss of efficiency and without running the country into any danger whatsoever. I remember the Chancellor of the Exchequer presenting his Navy Estimates in 1914. Being a new Member of the House, I took part in that debate and supported him in the large expenditure which he invited the House of Commons of that date to pass. But surely, if you go through the Navy Estimates item by item, which I have no intention of doing, it would be quite easy to cut down large sums. Take, also, the Army Estimates. He appears to have forgotten that the main purpose of our Army before the War was to send an Expeditionary Force to the Continent. The Chancellor of the Exchequer may shake his head, but surely it is common ground in all parts of the House.

Mr. CHURCHILL: There has been no addition to the number of men in the Army.

Sir G. COLLINS: That is not my point. The main purpose of our Army before the war was to maintain an Expeditionary Force with the object, if necessary, of sending it to the Continent of Europe. That necessity no longer exists. Our Army to-day is needed to defend our Imperial position, and, if you have regard to our Imperial position, with the increased power per man, in view of the tanks, the machine guns, aeroplanes, and other scientific methods which the war has developed, surely it is quite unnecessary to have such a large Army, seeing that the necessity to send an expeditionary force to the Continent no longer exists. I submit that the Chancellor of the Exchequer could well reduce the sum set aside by the fighting services by at least £40,000,000. How do I arrive at that figure? I find that in 1875, when a Conservative Government was in power, and when this country was not in any danger of war, the Chancellor of the Exchequer at that date made provision equal to a sum of 2 per cent, of our national income; and in 1891, again under a Conservative Chancellor of the Exchequer, the provision granted by this House for defence amounted to a sum of 2 per cent, of our rational income.
I submit, in view of the fact that the European danger has been removed and in view of the increased striking force
which modern science has brought into play, the present size of our Army and our Navy on its present basis are quite unnecessary, and, if the Chancellor of the Exchequer and his Government would pursue a policy of peace abroad they could reduce the Estimates by at least £40,000,000, thereby reducing the taxation of the country and relieving the rates which press so severely upon our people at home. I know that the Chancellor of the Exchequer, if he endeavoured to do that, would have great difficulty with his followers behind him, but I submit that a Liberal Chancellor of the Exchequer to-day, if he were in power and were supported by a Liberal majority, would have regard to the international situation and to the real and deep feeling for peace which exists in the minds of people throughout the world and would shape his policy in accordance with that desire and that ambition; and, without sacrificing our position in the world it would be possible in my judgment so to reduce the Estimates by the figure I have mentioned and thereby grant large relief to the taxpayers and to the industries of this country.
Let me turn for a few minutes to our Social Services. I was very much struck by a remark made by the late Financial Secretary to the Treasury the right hon. Gentleman the Member for Central Edinburgh (Mr. W. Graham) on the Third Reading of the Finance Bill on this point. The right hon. Gentleman, after having been in office and having come in close contact with the local authorities and the Treasury, came to this conclusion. I am reading his words on the 25th June this year:
Strongly as we on this side will resist any attempt to interfere with the Social Services, we are just as keen, as any hon. Member to see that we get the best bargain for the money we are expending.
Then he went on to say:
I am not satisfied that we are getting the best return at the present day."— [OFFICIAL REPORT, 25th June, 1925: col. 1818, Vol. 185.]
Surely, if the right hon. Gentleman, after his experience in office, gives expression to that view, the Chancellor of the Exchequer, holding his powers to-day, can secure in our Social Services more value for the money which the taxpayer is
granting. We on these benches do not desire to see in any shape or form any reduction in the Social Services of the nation; we believe that money spent on education, health, and such services is well spent money, but we are anxious, when this House of Commons votes money, to secure that the taxpayers' money is well spent, and, if the Chancellor of the Exchequer would direct his attention to securing value for money in the Social Services of the State, he might be able in the coming months to lower taxation. Often in these Debates figures are quoted of the cost of the Government Departments. I have had prepared for me the cost of the salaries of the officials of Whitehall, excluding the War Office and the Admiralty, and I find, according to the figures supplied to me, that the cost of the officials—or rather I might describe it as the cost of Whitehall—is upwards of £16,500,000 this year. That is the cost of officials alone in Whitehall, excluding the three Fighting Services of the Crown. I am not speaking of the salaries of teachers and different officials throughout the country.

Mr. CHURCHILL: Does that include pensions and Employment Exchanges?

Sir G. COLLINS: I have the exact statement here. I will read it: Estimates in Class II Salaries and expenses of Civil Departments, £11,350,000; Pensions Administration, £2,100,000; Ministry of Health, Administration England and Wales, £1,440,000; Scottish Board of Health—perhaps I ought not to have included that—£181,000; Ministry of Labour, Administration, London, £1,232,000; National Insurance, Audit Department, £164,000; a total of £16,500,000. Is there no room for reductions in these figures? Business men throughout the country and people of all types on all hands and among all parties are feeling the pinch. Nothing annoys the public more than the high cost of officials. I quite agree that these figures are small relatively to our national expenditure, and I have no desire to stress them, but they create intense annoyance in the minds of people, and, if the Chancellor of the Exchequer, or rather his Committee which he is about to appoint, would investigate these matters and let the country realise that the officials in London are reduced to a minimum, the taxation of the people would be paid more willingly and readily because
they would know that the Government of the day had a grip of the situation in Whitehall.
I have sketched out, very shortly, that the Fighting Services could be reduced by many millions of pounds. The Social Services in my judgment should not be reduced except on the basis of getting value for money. If the Chancellor of the Exchequer could reduce the Supply Services, he would be enabled directly and indirectly to reduce the burden of our National Debt. A frugal Government would be in a position to borrow more cheaply. The rate of interest on our National Debt absorbs many millions of pounds, and even a reduction of ½ per cent. on the rate would, I believe, reduce the sum by nearly £40,000,000. These are the items to which I desire to direct attention this afternoon. We know the right hon. Gentleman's energy, and we hope that he will succeed, but, as I have already said, he has lost in the first round of this fight. It might well be asked what can the House of Commons do in this matter?
Let me remind the Chancellor of the Exchequer that 100 years ago the House of Commons took this matter into its own hands, and refused to grant supplies to the Government of the day. The Government of the day brought forward large Estimates, and the House of Commons, in its wisdom as I believe, refused to pass the taxation which the Government invited it to pass. That is the only practical method of reducing the rate of our national expenditure. The House of Commons of that time, as I have said, refused to pass the taxation desired by the Government, but the Government of the day did not resign. They carried on, but smaller sums were placed at the disposal of Ministers, and within 18 months of that decision the Government of the day were forced to reduce their national expenditure and bring it into keeping with their revenue. I believe that, until the House of Commons decides to refuse any longer to grant the necessary supplies to the Government of the day, the present burden of national expenditure will continue.
It is thought in many quarters that if the Government Departments were rationed that might be successful, but I suggest that the best method would be
for the House of Commons next year to cut down the money set aside for national expenditure, and thereby force—or rather, I would say, assist—the Chancellor of the Exchequer to curb the spending Departments of the State. If he did so, what would be the result? Many of my Friends above the Gangway are not so interested in national expenditure as some of us on these benches. [Interruption] If I have misrepresented them, I am sorry. I have no desire to join issue with my Friends on this side of the House, but I am in favour of a reduction of national expenditure, not only because it will relieve the burden upon the taxpayer, but because it will enable working people to have larger sums to buy more clothes and more food, and to have more of the simple pleasures of life. High taxation and high prices go together. A high national expenditure is the cause of high taxation. It rests with the Chancellor of the Exchequer in the coming months to reduce the rate of national expenditure, and thereby bring relief to the overburdened taxpayer, and enable the wage-earning classes to have a larger sum in their pockets with which to buy the necessities of life. We make no apology, as I have said, far raising this subject this afternoon. We invite the Chancellor of the Exchequer in the coming months to direct his attention to this all-important matter, so that, when he introduces his Budget next year, he may be enabled to grant further relief to the over-burdened taxpayer.

Mr. CHURCHILL: This is a very proper subject and a very proper note for the work of this part of the Session to close upon. I am not at all complaining of the speech of the hon. Member for Greenock (Sir G. Collins), or of the occasion he has taken for raising this subject. I welcome support in the cause of national economy from every quarter. The only difficulty in which I find myself is that, in endeavouring to show to the hon. Gentleman and to the country what are the limits within which this problem of economy lies, I may run the risk of being accused of offering some defence for the present rate of expenditure. That is not my intention. My intention is to do all in my power to effect a steady and searching diminution of our national burdens. But, although everyone preaches economy, few practise it. Every
party, every group in the House, has its pet economies, and also its pet extravagances. Everyone adopts an attitude with regard to economy similar to that described in the saying that everyone wishes to go to Heaven, but not immediately; and it is the habit of everyone, in regard to expenditure, to
Com pound for sins they are inclined to, By damning those they have no mind to.
One set of critics direct all their attention to the social services, which are very often described as the Civil Services. Another set, like the hon. Member for Greenock, concentrate their gaze sternly upon the Defence Forces of the Crown. Most of my time is taken up, not in making reductions, but in resisting further demands for expenditure—and not resisting foolish demands or improper demands, but resisting demands for wise expenditure, for desirable expenditure, and sometimes for just expenditure. We do our best to resist them all. Wise, necessary, or just as they may be, the time has come to call a decided halt, but although I have no doubt been guilty of many shortcomings during the present Session, I would draw the attention of the House to the fact that those shortcomings have been made public while any successes which I may have achieved, are necessarily wrapped in the mists of official secrecy.
The hon. Gentleman asks why does the Chancellor of the Exchequer allow this or that or the other—why does he allow so many men for the fighting Services, and so on? The Chancellor of the Exchequer is not a dictator. I have not been invested with dictatorial powers; if I were, I should be quite ready to dictate. But nobody has really brought the matter to that point effectively at the present time, and I must say that, when I do approach any existing expenditure with a view to effecting some reduction, the resistance becomes most violent. The other day a rumour was set about that the Chancellor of the Exchequer contemplated a raid on the Road Fund, and immediately there was a mobilisation of all the motorists, all the agriculturists, every interest connected with the Road Fund. I think it ought to be considered, like everything else. Whether, in fact, we can afford to spend as much as £17,000,000 a year on the development of roads is, surely, a question
which should from time to time be reviewed by the Government. Some of these great expensive roads may well be beyond what the present state of our finances entitles us to afford. At any rate, no item of expenditure ought to be sacrosanct, and not even allowed to be scrutinised because of the indignant resentment which its particular supporters display. We have heard disputes about naval expenditure, and, perhaps, one day, we shall hear disputes about expenditure on the Army or the Air Force, but certainly it is the intention of the Government to overhaul very strictly all these Departments and Services.
I will ask the House to follow me in a lightning survey of the whole field of our expenditure, so that we may see exactly what are the limits within which reductions may be hoped for. It is no good living in a fool's paradise, as some of our sprightly coadjutors in the Press appear to do. Our pre-War expenditure was £205,000,000, and it has now risen to £800,000,000. Of that £800,000,000, we must first take off £355,000,000 for the Debt charges, and £36,000,000 for the other Consolidated Fund charges—payments to the Road Fund, Northern Ireland, the salaries of Judges, etc. I do not say there is not room for scrutiny there, but I will put that on one side. That leaves £407,000,000 for the Supply Services. I leave out the fighting Services for the moment. They are £120,000,000. I will leave out also the Post Office, which is £52,000,000, because it would be absurd to count that in the total of our expenditure, since it produces revenue greater than the expenditure. I really think it may well be that the day will come when we shall have to simplify our accounting in that respect.
I will therefore leave that out, and I will leave out also the £11,000,000 for the collection of the taxes. It may be that economies are possible in the collection of the taxes, but economies in the collection of the taxes which left a large portion of the taxes uncollected would hardly be economies which a thrifty Chancellor of of the Exchequer would hasten to enforce. Leaving all that out, we find that we have about £344,000,000 of expenditure left, of which £120,000,000 is for the fighting Services and £223,000,000 for the Civil Service Estimates. This expression "Civil Service Estimates" is really much
misunderstood, and is still more widely misrepresented in political discussions. People imagine that £223,000,000 is spent upon a horde of greedy civil servants in Whitehall, and they point to great increases in this respect since the days before the War.
This £223,000,000, however, requires considerable analysis. £93,000,000 is represented by pensions, old age and war. Is it suggested that we should reduce that? £47,000,000 is represented by education. Is it suggested that we should reduce that? £13,000,000 is represented by Unemployment Insurance. Is it suggested that we should reduce that? [An HON. MEMBER: ''You have done it!"] Is it suggested that we should reduce that further? £7,000,000 is represented by Health Insurance, and there is £9,000,000 to be paid on account of housing. That is statutory. That makes £169,000,000, subtracting which from £223,000,000 leaves £54,000,000 over for every other conceivable activity of the Government—public buildings, agriculture, Colonial Services, Foreign Office, and every other conceivable Service. I quite agree that the whole of these should be overhauled continuously. We have always to face an upward movement. An automatic growth is going on in many branches of expenditure and, unless there is a continuous pruning of the work, we shall, so far from making a reduction, see our expenditure in every branch steadily mounting.
1.0 P.M.
We cannot arrest the automatic growth of many Services. Pensions are growing, superannuation of teachers will grow substantially, other Services grow automatically under decisions of Parliament, and it is necessary that there should be countervailing cuts and economies if we are to maintain our existing position. If you leave out, as I think you should, from this immediate survey, the staffs engaged in the Employment Exchanges —though they should certainly be carefully surveyed—and the staffs engaged in the payment and administration of pensions throughout the country, the total cost is quite correctly stated by my hon. Friend at £11,000,000. I think that is certainly a field of expenditure which is capable of reduction and compression. It is very desirable to keep on reducing
the number of officials engaged in any particular Service, and there is no doubt that a diminution in the number of Government officials makes for economy, apart altogether from the saving in their salaries. Officials undoubtedly tend to make expenditure. They cannot help suggesting improvements, and the more able they are the more seductive and reasonable are the improvements they suggest. They are, however—I must be just—very feeble allies of the politicians in this respect. Those who are most ready to suggest improvements are the politicians, and never are they so ready to suggest improvements which cost money as after or during a period when there have been three General Elections in quick succession, when three separate sets of Ministers have taken their seats on the Treasury Bench, all animated by a laudable desire to make a reputation for themselves at the public expense.
But the House and the country must not be deluded into supposing that large sweeping diminutions in our expenditure are to be obtained from that source. Even if we were to strike off 25 per cent. from the Civil Service of the State and to say that vacancies were to be filled up at a much slower rate until that reduction had been completed, the saving which would, of course, mature slowly, would not amount to more than £3,000,000 or £4,000,000 a year, an important sum but one which will not appreciably affect the scale of the problems of finance with which the Chancellor of the Exchequer has to deal. Unless you are prepared to tackle the legislative decisions that Parliament has taken in regard to the social services it will not be possible to make diminutions on the scale some people have in mind. If Parliament were prepared to contemplate an altogether cheaper way of living for the whole nation, with less good education, less generous pension Services and less scientific administration of health and other Departments, unless they are prepared to legislate to effect these reductions do not imagine that enormous contractions of expenditure are possible.

Mr. GROTRIAN: Why not?

Mr. CHURCHILL: These social services are intimately interwoven with the whole life of the people and intimately concerned with the advanced standard of culture of the whole people, and it is to my
mind unthinkable that these Services should be drastically cut down and the whole way of the nation's living altered unless at least proportionate additional sacrifices were exacted from the direct taxpayers by means of large increases of direct taxation for the purpose of a more speedy amortisation of the National Debt, and consequent reduction of the annual debt charge. Unless Parliament were prepared to inflict, as it may have to do some day—the day may come when, if the nation does not prosper, its whole scale of living must be reduced, and if and when that day comes Parliament must impose its sacrifices equally and simultaneously and in just proportion upon all classes of the population.
Now I am going to say a word about the Fighting Services of the Crown. Here I make no apology for expenditure. The world was never so peaceful. At least I will not say that, but the world was never so free from the menace of highly organised war by great Powers, and it certainly should be the prime endeavour of His Majesty's Government to keep the expenditure on armaments at its lowest point. But let us see what the position is. Take the Army first. The Army was not increased on account of the German menace. Certain arrangements for organisation were made by that great War Minister, Lord Haldane, before the War to arrange for the equipment and organisation of the Expeditionary Force, but this did not entail a large expenditure nor any substantial addition to the forces. The Army we had before the War was proportioned, not to the German menace or to fighting a Continental War. It was utterly out of all relation to that. It was proportioned to what were considered to be the normal police duties of the British Empire during a period of peace, the maintenance of our large force in India and to the general service of the British Empire.

Sir G. COLLINS: The right hon. Gentleman has quoted India. Has the Government taken into account that the British Army in India has been reduced in numbers as the result of the Committee presided over by Lord Inchcape. Are they going to reduce the Army at home in keeping with our reduced commitments in India?

Mr. CHURCHILL: I am not going into the details of the Army Estimates for the
coming year, but the Army has been reduced very substantially. What I say is that the fact of the removal of the German menace is not in itself a ground for a substantial reduction of the British Army, because that Army was not increased for the purpose of meeting that menace. It existed for the maintenance of peace and order throughout the British Empire. Since the War the British Empire has not got smaller. It has got larger, and it has not got in every respect more tranquil. We have additional responsibilities and it is impossible to argue that very large reductions in the scale of the British Army are possible. Still I agree that some reductions ought to be made, and will be made, and I know my right hon. Friend the Secretary of State for War, who is extremely effective in dealing with facts and figures, and who has a very thorough comprehension of financial problems of all kinds, is continuously at work in preparing proposals to reduce the total burden of Army expenditure. Then take the Air Force. The Air Force is at present expanding under a scheme approved in all parts of the House. What does my hon. and gallant Friend say to the Air Force? I do not know if that is an exception that he will make from his general attack on expenditure.

Captain BENN: May I ask whether, in negotiating with the French Government about their debt, the right hon. Gentleman raised the question of mutual aerial disarmament.

Mr. CHURCHILL: I should complicate the discussion if I raised that point, but the good relations between our country and France ought to be taken into consideration in deciding upon the rate at which the expansion of the Air Force should proceed. But anyhow, I am only saying, here is a proposal for an expansion, here is a proposal for increased expenditure on a scheme set on foot in the days of the Coalition, perpetuated in the days of the Conservative administration which followed it, and finally carried through without any diminution by the Labour Government. That is the position in which we stand at present as far as that is concerned. I certainly consider it is the duty of the House and the Government to re-examine and review all these items of expenditure.
Then there is the question of the Navy. We had a discussion about that the other
day. I am not dissatisfied with the results of the very long Debates we have had inside the administration upon the new programme and the scale of naval expenditure, but I am quite clear of this, that the expense of rebuilding the Fleet has got to be met to a large extent by reductions in the administrative charges of the Admiralty and of the Navy generally. If there are cruisers that are considered to be of very low value, that may be a reason for not keeping them steaming around the world at very high cost. We may have to consider placing a portion of our Fleet in those reserve formations which we used so greatly before the War, and it may be that we shall have reason for relying to some extent upon reserve formations in regard to the manning of a portion of the Fleet during years in which no immediate naval menace threatens, and there may be many other methods of effecting a reduction. But we have the definite undertaking of the First Lord that he is going to do his best to effect reductions in expenditure in order to compensate, and I trust more than compensate, for the cost of rebuilding the Fleet.
We are going to help the fighting services in making these economies by reinforcing their efforts with a Committee of eminent persons of great experience, quite detached from public service.

Viscountess ASTOR: You say you are going to economise. Are you going to economise on the marriage allowance to officers, and would that come in now?

Mr. CHURCHILL: I understand that question is to be raised later in the discussion, and I should be forestalling it if I were drawn into a detail of that kind. We are setting up this Committee of three eminent public men, unconnected with the Government, whose first duty it will be to overhaul the administrative expenditure of the Army, the Navy and the Air Force. I am glad to say Lord Colwyn has undertaken to be the Chairman of this Committee, and he will be assisted by Lord Chalmers and Lord Bradbury. You could hardly have, from a Treasury point of view, a stronger group. The work of the Committee will be, in the first instance, to report to the Cabinet the specific reductions in Admiralty expendi-
ture which will be necessary, if approved, in order to meet the extra cost of beginning the cruiser programme this year instead of next year. That is their first duty. Secondly, their duty will be to examine and overhaul the administration expenditure of the whole of the three fighting services, beginning with the Navy. They will find ready at their disposal a most valuable and confidential report which was made by Lord Weir at the end of 1922 or the beginning of 1923. I was in those days chairman of the Cabinet Committee which examined the Estimates of the three fighting services, and I was very much struck by the growth of the staff in the different fighting services, out of all proportion to the rank and file, and also by the fact that posts which were formerly held by officers of moderate rank were now held by officers of much higher rank, with all the extra expense that flows from that. I, therefore, asked Lord Weir, with the approval of the then Prime Minister, to undertake an inquiry. Many changes of government have taken place since then, and in the general turmoil and confusion into which our affairs have been plunged, action has not been taken on that report. That report will be placed before the new Committee and will, undoubtedly, give them an immediate provision of most valuable and pregnant material. That is what I would say in answer to the speech of my hon. Friend.
I will close by giving certain figures to the House, because I do not want the public or the House to be deluded by the idea that some great reduction of £100,000,000 or £150,000,000 in the expenditure of the country is possible at the present time. I do not think it is, and I am not going to indulge or encourage false and visionary hopes of that kind. If you take the expenditure before the War and the expenditure at the present time and compare them, like with like, I think the House will be surprised at the result. You have, first of all, to deduct from the £800,000,000 of to-day the increase in the debt charge of approximately £330,000,000. You have to deduct also the increased charge for War pensions and for old age pensions, £83,000,000. You have to deduct £14,000,000 for the growth of the pre-War social insurance scheme. That makes a total to be deducted of £427,000,000. Sub-
tract that from £800,000,000 and it leaves £373,000,000, comparable with the pre-War expenditure. But that £373,000,000 must, if you are arguing the matter fairly, be scaled down in the ratio of 175 to 100 to allow for the decreased purchasing power of the pound sterling. Or, in other words, for the higher nominal value of the cost of the same service. It must be remembered also that our taxation like our expenditure is based on this devaluated pound. Applying the ratio of 175 to 100 to this figure of £373,000,000, we have a figure of £214,000,000, which is the comparable cost, making allowance for the alteration in the level of prices of the expenditure of the country. The pre-War expenditure was £205,000,000. Comparing like with like, that figure of £205,000,000 may be compared with the figure of £214,000,000. That is, I fancy, rather a surprising figure. But I do not at all rest content with the results of that calculation. We are a country in many ways poorer than we were before the War. We have suffered terrible losses, and we have this great burden of debt thrown upon us, and if we are to recover and to lift that burden of debt and gradually reduce it, it is necessary not merely to be content to keep at about the level of our administration expenditures in pre-war times, but that we should endeavour to reach a lower level of expenditure in so far as that can be done without weakening the essential minima, of national defence, or making an improper inroad upon the social requirements of the people.

Captain BENN: Has the right hon. Gentleman formed any plan as to how he is going to raise the additional £10,000,000? Can he indicate whether it will be by indirect or direct taxation?

Mr. CHURCHILL: By none of these means. I am not proposing to make any provision for this charge in the present year. I said so last night. We will see what the state of the national finances is when the balance on the year is completed It may be that not the whole of the charge will present itself in the form of a deficit. I do not know. I cannot forecast what the state of the finances will be nine months from now. Whatever it is, I shall bridge the gap by temporary borrowing, as has often been done on these occasions, remembering the many occasions on which
a large surplus has gone to make provision for the payment of debt far beyond what the House of Commons has voted, under the well-known and salutary machinery and procedure of the Old Sinking Fund. If at the end of the year our finances show a deficit of £10,000,000, or whatever it may be, for this extra charge, that will be a matter which I shall be bound to take into consideration in preparing the proposals next year. It would not mean that new taxation would be imposed this year. I cannot imagine-that any definite additions to taxation will be required next year on this account but it would have the effect of retarding further remission of taxation which otherwise I might hope would be possible.

Mr. SNOWDEN: I quite agree with the Chancellor of the Exchequer as to the importance of this subject, but I do not think that on the last day of this part of the Parliamentary Session, when the holiday spirit has seized Members of Parliament, is the best occasion for a serious discussion of this matter. I think most hon. Members who have listened to the speech of the Chancellor of the Exchequer will have felt a somewhat depressing effect. The right hon. Gentleman has held out no hope whatever of any substantial reduction of national expenditure. It will be remembered that in his Budget speech he said he hoped that he might be able to effect a progressive reduction of £10,000,000 a year in national expenditure. That hope through various causes, some of which are perhaps beyond the power of the right hon. Gentleman, has been dissipated. Anyone who expects the right hon. Gentleman will be able to stand at that box at the end of the next financial year and present a Budget which does not show a considerable deficit, is very sanguine indeed.
May I, at this point, congratulate the Chancellor of the Exchequer upon having succeeded in getting such a strong Committee for the consideration of the items of national expenditure? I do not think it would have been possible for the Chancellor of the Exchequer to get the services of three men more competent to undertake such a task as Lord Colwyn, Lord Chalmers and Lord Bradbury. I have no doubt whatever that they will do their work thoroughly. Two of them
at least bring a long and practical knowledge of public administration and public expenditure. The difficulties of the Chancellor of the Exchequer will begin when the labours of this Committee have concluded. He will then have to face what he himself described a few days ago as the vested interests in expenditure which exist in public departments. I must confess that I have very little hope that the outcome of this Committee will be to effect any considerable reduction in what we may call the detailed items of expenditure of our fighting services.
There are only two Departments or spheres of public expenditure upon which, I believe, it is possible to effect any considerable reduction of expenditure. The right hon. Gentleman expressed the view that it will be difficult, if not impossible, to bring about any reduction in expenditure upon what are called, I agree, with the right hon. Gentleman, somewhat erroneously, the Civil Service Departments. The hon. Member for South-West Hull (Mr. Grotrian), when the Chancellor of the Exchequer was referring to the increased expenditure of Social Services, said that we got along all right in the past when expenditure was not so high, or when there was no expenditure upon education, old age pensions, public health and the like.

Mr. GROTRIAN: That was not what I intended to convey. What I meant was that if you abolish some of the Ministries which administer these funds you would have more money for the funds. For instance, if you abolish the Ministry of Pensions you might be able to give more pensions to the pensioners.

Mr. SNOWDEN: What the hon. Gentleman really did say was that we got along very well in this respect without these social services, but how did we get along? Simply by three-quarters of the children of the working classes of this country not even being taught how to read or write. At that time there was no extension of our public health services, and we had a death rate of 300 per 1,000 amongst children under five years of age. The system then adopted also placed the aged people at the tender mercy of Poor Law relief. Whatever the hon. Member opposite may say, there certainly is no one
who will suggest before the country that there should be a reduction in regard to social services such as education and Old Age Pension. Therefore, we must come to the conclusion that if we are to look for a reduction in natinal expenditure we cannot find it to any substantial extent in a reduction of our expenditure on our social services.
I agree with an observation which was quoted by the hon. Member who introduced this discussion, which attributed to my right hon. Friend the Member for Central Edinburgh (Mr. W. Graham) a statement that the Labour party is in favour of increased expenditure on social services, or rather of an extension of our social services. At the same time I would like to point out that the Labour party are anxious that we should get 20s. worth for every £ we expend even on the social services, and I think it would be a business proposition to make some moderate reductions on expenditure by overhauling the separate items of expenditure in connection with these services. Take for example education. I am sure none of us want to see a reduction in the total amount of our expenditure upon education. At the same time it might be possible to effect a few minor economies in regard to educational expenditure which might be devoted to increasing the educational efficiency of the system. On the other hand we should certainly offer the most strenuous opposition to any suggestion for a reduction of expenditure which meant the curtailing of any of these social services, and we should support any extension of the activities of the State in these directions. I should consider that any hon. Member would be living in a fool's paradise if he expected to see the total amount which is now spent on the social services substantially reduced. I do not care what party happens to be in power, they will, Session after Session, have to bring in social legislation for collective effort and organisation to improve the social conditions of the people.
There are only two items of national expenditure from which we can expect to get any substantial relief of taxation, and one is a reduction of our expenditure upon the Fighting Services. The hon. and gallant Member who introduced this discussion compared the expenditure upon the Navy this year with the year before the
War, and the Chancellor of the Exchequer interrupted him and asked him to translate the expenditure of this year into the prices of 1914. That point has been made more than once. It was made during the recent Debates on the Navy, but I really do not think there is much in it. I do not think it is fair to compare even in equivalent terms the expenditure upon the Fighting Services of to-day with that of 1914, because there was a very abnormal expenditure in that year. In the previous seven years the naval expenditure had risen from £30,000,000 to £60,000,000, and therefore it would have been more appropriate to have made the comparison not with the year 1914 but with the year 1906. But, even after we have taken into account the increased price, we are spending more on the Navy to-day than we were in 1907. We are spending upon the Fighting Services this year £127,000,000, compared with £80,000,000 in the year before the War.
But things have happened since 1913 because in that year we had a European menace which has now disappeared. The Admiralty are perfectly well aware of this, but in order to justify their expenditure this year they must have a menace somewhere, and now that the European menace has been removed the Admiralty have found another menace in the Far East. We have voted this year £4,500,000 more for the Navy than the Estimate of the year before, and perhaps it will be £7,000,000 or £8,000,000 more next year than the inflated Estimates of this year. We must look forward to this with as much satisfaction as we can give to it, but the fact remains that for the next seven or eight years at any rate there is going to be no reduction in the expenditure upon the Navy, whatever minor economies may be effected upon the recommendation of the Committee which is about to inquire into the naval expenditure, if the present policy of the Government is maintained.
We have heard something about a world conference to discuss the question of disarmament, and its object is a reduction, not only of the naval expenditure, but also a reduction of the expenditure of every branch of the Fighting Services. We are under an obligation to do that, and it is not right to justify our present expenditure on the Fighting Services by a comparison with our expenditure before the War. Before the War there was a Euro-
pean menace, and we were parties to the Covenant of the League of Nations which imposes a solemn obligation upon all the contracting parties to the Covenant to carry out a progressive reduction in armaments. Instead of doing that we are increasing our naval strength and making no substantial reduction in the Army. We have also got an Air Force programme which will involve an increase in the Air Estimates for the next five years. Therefore I say that there is only one way of reducing expenditure on the Fighting Services, and that is by a change of policy, by co-operation with other countries which are groaning under the intolerable burden of the cost of armaments. There is no hope of getting any substantial reduction of this large expenditure except in co-operation with the other great Powers of the world.
The second item upon which I think some reduction might be made is the burden of the Debt Services. The Chancellor of the Exchequer has spoken of the burdens which this country may be called upon to bear in the years immediately in front of us, and the great difficulty there will be in meeting national expenditure. I shall not be surprised, unless there is a radical improvement in the financial position of this country, if it is not found within the next few years that the burden of the National Debt is so great that extraordinary steps will have to be taken to reduce the amount of that debt, and correspondingly the annual charge for the service of that debt. But apart from that, if it were possible that the whole of the outstanding War Debt of £6,000,000,000, excluding the American Debt could be converted—at the present time it is 5 per cent.—say to 4 per cent. that would effect a reduction of £60,000,000 in the amount of interest which is annually required for Debt Services. That would be a very substantial reduction of taxation. But we shall not be able to effect conversion schemes on advantageous terms unless at the same time we are maintaining national credit and reducing the volume of national expenditure by curtailing expenditure which is not remunerative either directly or indirectly.
Therefore, it is most important that we should reverse our present policy of increasing expenditure which is not remunerative. As I have said, we are not opposed to a big national expenditure. My own view is—and I have expressed it
often in this House in years gone by—that the most economical form of expenditure is social expenditure. We get a far better return for the money that we spend collectively, either through the State or through the local authorities, than we do if we leave that money in the pocket of the individual to be spent according to his own caprice or whim or desire. Therefore, instead of being opposed to an increase of national expenditure in that way, we welcome it. I tell the party opposite that if ever, as a result of a General Election, the Labour party should form a Government the country may look forward to very comprehensive schemes of this kind, far-reaching schemes, and we shall not hesitate to raise the funds for that purpose by the taxation of the surplus incomes of the wealthier classes of the community.
While that is our policy, at the same time we are the sworn foes of all uneconomical expenditure and all unnecessary expenditure, because uneconomical and unremunerative expenditure is undoubtedly a hindrance to the development of trade and is a burden on industry, while remunerative expenditure is never a burden on industry, but is an aid and a stimulus to industry. There is very little, if any, substance in the argument that a high Income Tax is a hindrance to trade.
Something like one-half of the expenditure mentioned by the Chancellor of the Exchequer this afternoon is for wholly unremunerative purposes. The amount that we have to raise for the service of the War Debt and the amount that we have to raise for the expenditure on the fighting forces represent nearly £500,000,000 out of a taxed revenue of between £600,000,000 and £700,000,000. That part of our national expenditure undoubtedly is a burden upon industry. If we continue to raise that money, and we spend it on purposes which, in their effect, improve the education of the people, improve the health of the people, and put more purchasing power into the pockets of the people, then undoubtedly that expenditure, high as it is, will have a beneficial influence on trade, whereas unremunerative and wasteful expenditure has the opposite effect.
There is not much hope in the statement of the Chancellor of the Exchequer that we can look forward in the years immediately before us to any substantial reduction of this unremunerative and wasteful form of national expenditure. So long as it continues it will be a burden upon industry, and to the extent that it takes money for these wasteful purposes out of industry, to that extent will the recovery of industry be retarded. During the Budget Debates the House of Commons is unanimous in demanding a reduction of taxation. We on these benches demand a reduction of the expenditure which presses heavily upon working people—the abolition of indirect taxation. Hon. Members opposite look after their special friends. They support the reduction of the Super-tax and of the Income Tax. That is what happens during the Debates on the Budget and the Finance Bill. All the rest of the time of the Parliamentary Session is given up either to conceding or resisting demands for increased expenditure in every part of the country. I quite agree with an observation that was made by the hon. Member for Greenock (Sir G. Collins), that the House of Commons will have to exercise a more drastic control over expenditure than it exercises at the present time. I know how difficult it is. As a matter of fact, the House of Commons to-day has no control whatever over national expenditure.
In this Bill, to which we are to give a Third Reading in the course of an hour, we are empowering the Treasury to spend nearly £700,000,000 of money. That total is composed of many thousands of individual items. The House of Commons has never discussed one of those items. When the Vote of a particular Department comes forward, for £2,000,000 or, it may be, for £50,000,000, we do not discuss a single item of the expenditure. The Debate is confined entirely to some matter of policy or of administration relating to the Department. I have ideas on the subject, but I have now no time to elaborate them. I have ideas and suggestions for putting an end to what is really a farcical proceeding. On two nights of this week, between 10 and 11 o'clock we tramped through the Division Lobbies voting hundreds of millions of money without knowing what we were voting, without having discussed at all whether the particular items of expendi-
ture were necessary or not. Sooner or later the House of Commons will have seriously to face that question. We shall have to consider giving back to the House of Commons what was the original and chief function of the House, namely, the control of expenditure. It is no use talking about increased taxation unless we control expenditure. If this House sanctions expenditure it is in honour bound to vote for taxation to meet that expenditure.

Sir FREDRIC WISE: I quite agree with the right hon. Member for Colne Valley (Mr. Snowden) as to the importance of this Debate. I quite agree, too, with his statement that the country should receive 20s. for a pound. I was, indeed, disappointed with the speech of the Chancellor of the Exchequer, for I felt that he did not offer us very much hope of reduction of expenditure in the future. None the less, the reduction of expenditure is the most vital question before the country at the present time, and I congratulate the Liberal party and the hon. Member for Greenock (Sir G. Collins) on having brought this important subject before the House. The right hon. Member for Colne Valley stated that most Members wish for additional expenditure. That is true. On Monday of this week we had a Debate on agriculture. I sat through nearly the whole of the Debate, and every Member who spoke while I was in the House asked for additional expenditure on agriculture, from research to the improvement of oysters. On Tuesday we had the Scottish Estimates. I need not refer to them, for we know what Scotland always gets when it puts forward its claims. The Chancellor of the Exchequer compared the figures of 1914 with those of 1925. In 1914 we were spending £200,000,000, and this year we are spending about £800,000,000. The right hon. Member for Colne Valley expressed the opinion that £800,000,000 was possibly too great a, burden for the country to bear. I agree with him. If he will compare £800,000,000—I sincerely hope that the Chancellor of the Exchequer will do so also—with the German expenditure of only £325,000,000, he will see the competition with Germany, and how Germany has an advantage in that competition.
I often think that the country does not realise what we can afford and the
importance of this expenditure. I feel that the country is thinking more of when Jack Hobbs will make his next 100 than of matters which are vital to everyone, not only in this House but throughout the country. In the last two years the Government expenditure has increased by £10,500,000. The hon. Member for Greenock referred to the King's Speech. The Government have not kept their pledge in regard to this economy, as it was stated in the King's Speech. The King's Speech said that economy was essential for the trade of the country, but even the Government increased expenditure in the last Budget. The economic situation is worse to-day than it was when the King's Speech was read. We are spending millions upon millions. I put a question the other day as to the Bills which had been passed this Session involving increased expenditure. There were 16 such Bills, representing millions and millions. Some of them, possibly, were necessary, but they mean millions of pounds, and until we get a sense of proportion and realise what a million is, I feel confident that this country will not reap the benefit of the increased prosperity which is so essential for us all. The Chancellor at the end of his speech last night suggested the possibility of raiding the sinking fund. He said:
We have often in the past paid enormous sums, not intended by Parliament to be voted for the payment of debt through the salutary medium of the old sinking fund. And in this case if there should be a balance on the wrong side, and very likely there will be, that is a matter which we must take into consideration in deciding what remissions or additions are possible in regard to taxation next year." [OFFICIAL REPORT, 6th August, 1925, cols. 1692, 1693, Vol. 187.]
2 P.M
To-day the right hon. Gentleman said he would probably meet that by a temporary loan, such as on the floating debt. May I remind the House that the floating debt has increased by £40,000,000 since 31st March this year. The revenue to date from the 31st March is £8,000,000 down, and the expenditure is £6,000,000 up. These are important and vital figures. I wonder what we may look forward to when the next Budget is introduced? I am very pleased that the Chancellor has appointed three strong men on the Economy Committee.
I felt that a Cabinet Committee was only playing with possible reduction of expenditure, but I feel that these three men will understand the intricacies of national finance, and I sincerely hope that in due course they will be able to reduce national expenditure. I am confident it can be reduced. As the right hon. Gentleman who has just spoken pointed out, you have two special classes of services, the Consolidated Fund services and the Supply services.
The Consolidated Fund services I feel sure can in due course be considerably reduced by a funding loan if we look after our credit. I would not be surprised if a voluntary funding loan were possible so as to reduce the capital expenditure incurred by interest on the Consolidated Fund service. We have maturities next year of £113,000,000, but we want to look in advance of next year. We want to look forward four or five years. We have to look forward in the next four or five years when big maturities take place, to an amount of £1,000,000,000, and a possible further £2,000,000,000 of five per cent. National War Loan which can be redeemed by the Government in 1929. It is necessary to look well ahead with regard to these maturities and then we will be able to convert at a lower interest rate. With regard to the supply service, there are the fighting services and the civil services. Take the fighting services. The cost of the defence of this country is enormous. In 1914 it was £81,000,000, and in 1925 it is £127,000,000. Canada, Australia, New Zealand and South Africa only spend just over £9,000,000 on defence. Comparing 1914 with 1925, Canada has only increased her cost of defence by £200,000, and South Africa has actually reduced her cost of defence. Australia and New Zealand have increased theirs. But I feel confident that the expenditure on our fighting services can be reduced.
The hon. and gallant Member for Hertford (Rear-Admiral Sueter) said the other day that we had spent £550,000,000 since the War on our Fleet. What have we got for it? The Chancellor of the Exchequer said recently that we have to renew our Fleet. What has happened to the £550,000,000? What about the Royal Dockyards? Are we to continue the
present expenditure on Royal Dockyards which is more than double what it was in 1913–14? Take another item, the naval staff. In 1913–14 it cost £19,000; to-day it costs £101,000. If there is one Service more than another which wants drastic consideration, it is the Navy. The Geddes Committee made certain recommendations, and I think the House may remember the reply which the Cabinet received to the suggestions of the Geddes Committee. Take the Army. Undoubtedly, reductions could be made. I put a question down recently in regard to the Army of Occupation in Egypt, and I find that the cost in 1913–14, including Air Force, was £634,000, and in 1925–26 the cost was £1,170,000. Although these may be relatively small items, they all add up, and they would make possible a general reduction such as I believe to be absolutely necessary.
Take the case of the Ministry of Labour. The Committee on estimates recently made certain suggestions with regard to the offices of the Labour Ministry which I do not think have been carried out. The Foreign Office staff, which was formerly 180, is now 780. The Cairo Residency in 1913 cost £15,000, and there were six officials. In the estimates of 1925–26, including maintenance of the house, the cost was £42,300 for 20 officials. Why are there 20 officials? All these matters should be thoroughly examined. I would ask the Financial Secretary to the Treasury to realise that the nation is paying too much. The problem is gigantic. I have here a speech made by the President of the United States, in which he says:
Economy in the cost of Government is inseparable from reduction in taxes. We cannot have the latter without the former. From some sources the statement has been made that this continuing drive for economy in federal expenditure is hurting business. I have been unable to determine how reduction in taxes is injurious to business. Each tax reduction has been followed by a revival of business. If there is one thing above all others that will stimulate business it is tax reduction. If the Government takes less, private business will have more. If constructive economy in Federal expenditure can be assured, it will be a stimulation to enterprise and investment.
These are important words, and show what the President of the United States thinks about a reduction of taxes. What does it mean? We are living beyond our
means, and the House and the country ought to realise it. The Chancellor of the Exchequer on the Third Reading of the Finance Bill said:
It is fixed 'bayonets' on every quarter." —[OFFICIAL REPORT, 25th June, 1925, Col. 1832, Vol. 185.]
I think his bayonets must be rather blunt after his speech to-day, and I feel, now that we are adjourning until 16th November, the right hon. Gentleman ought to explore every department to see what reduction can be made. We have no margin of safety at the present time, and I implore the Government, with all the force that I can put into words, to search every avenue of retrenchment for possibilities of reduction in Government expenditure.

Mr. STEPHEN: I think every member of the House agrees that in national expenditure there should be the utmost economy. That is a proposition which any Member of the House or any individual would be prepared to accept. We all agree that we should get the most for what we expend, whether in the case of the nation, or in the case of the individual. But I regard with a great deal of suspicion many statements made with regard to the possibilities of economy in national expenditure. It has been pointed out that in 1914 we had a Budget of £200,000,000, and that to-day we have reached the figure of £800,000,000. The impression is always conveyed that this is an extraordinary increase. I notice however that the people who are keen on economy in national spending pay no attention to the fact that a great part of this burden of £800,000,000 is interest on the National Debt. Again and again economists in this House examine expenditure on oyster fishing, or something like that, and point to the possibilities of saving in this or that Department. But with regard to the big item in our national bill, there is a closing of eyes to the problem involved in the National Debt, and the interest which the country has to bear in connection with it.
I am very much perturbed about the situation which is developing. When the Coalition Government was in office a similar propaganda was started in the country as to the need for national economy because of the country's position, and, at the critical moment, we had the Geddes Committee, whose business it was to go over the whole national
expenditure and find out the possibilities of retrenchment. I believe that the worst thing that has happened to this country since the War was the activity of the Geddes Committee. They suggested economies, but, just as is always done in this House in these discussions, they shut their eyes to the one great drain upon the country and discovered ways of saving at the expense of education and at the expense of working class folk in this country.
I am in thorough agreement, and I think most Members of these Benches are in agreement, with what has been said regarding the fighting services, and we wish God speed to the Chancellor in every he makes with regard to reduced spending upon the defensive forces, but I want to enter a caveat against any reduction in these social services, which are of so great an importance to the ordinary working class people in the country. The hon. Member for Ilford (Sir F. Wise), speaking in regard to the terrible position in which we find ourselves, used the example of Germany, and because of my respect for him and for his contributions to the Debates in this House, I did not make the interruption that was in my mind, but because of what happened in Germany with regard to the exchange and the mark, Germany is not burdened with this great burden of National Debt that we have to bear. Suppose you take the £350,000,000 annually for interest on this Debt, and cancel it, and deduct those figures from our national expenditure, then we are not so very far removed from the expenditure of Germany on Government services. One of the things that is keeping us back is this sort of suggestion that all the Government Departments are so spendthrift with their money. I know that the Treasury, while our Government was in office was not spending on the various Services what I think it should have been spending, and I do not think the present Treasury is anywhere near being so sympathetic to expenditure that should be undertaken as it ought to be.
Take the Ministry of Pensions and the Ministry of Labour. I believe that the Treasury would be acting wisely if they were not nearly so restrictive in their attitude to those two Departments as they evidently are. There are hundreds of thousands of people in this country, the
great mass of the working class, who would benefit greatly if the Treasury were not so harshly economical as they are in connection with those Departments. I noticed in the newspaper yesterday a statement about the sensation that had occurred in the reduction of the Bank rate, and I take it, therefore, that there is plenty of money to be had when the Bank is reducing the rate. I do not think that all those warnings and Cassandra-like utterances of so many hon. Members in this House are justified, and I want definitely to-day to say that if any of those reductions are going to be imposed in connection with the social services, we will fight them to the utmost of our power. We believe that there is the need for increasing and ever-increasing expenditure in connection with these matters.
Suppose you took £70,000,000 or, say, £50,000,000 out of the £350,000,000 that is paid in interest on the National Debt, and, instead of that £50,000,000 going to the people that it is going to at the present time, it were distributed in increased wages among the workers of the country, I believe that you would do far more in that way to bring this country to a period of prosperity than by any other means. It would be putting a purchasing power into the hands of the people of the country that would be expended on commodities. It would not go to capital expenditure, expenditure on plant, so much as to expenditure on commodities for immediate consumption, and the result of that would be that it would produce an improvement in the trade of the country, because we always tend to forget that the big market is not the foreign market. It is not the trade with other countries that forms the big market, but the home market, the market in providing for the needs of our own people; but we set our eyes towards the ends of the earth, and we forget the home market because it is always there, and the people at home cannot get away from the profiteers in the way that the traders in other countries can do. Because they cannot get away from them, they have to take their goods, and we take the home purchaser for granted, so that that part of our market does not get anything like the consideration that it ought to get. If the working classes of this country got £50,000,000 out of that £350,000,000, I
believe that it would produce a bigger step towards the prosperity of our country again than any of the suggested economies that various hon. Members have been putting forward in this House.
With regard to social services, I want to say that, in my opinion, a policy that has been suggested—and, I am afraid, a policy that may be carried out—is one that is suicidal, and that is the idea that the Treasury should say to each of the Departments, "That is your figure; you are going to get that amount of money, and you can spend it to the best advantage. We hope you will, but that is all that the country can afford for you at the present time." That means a rationing of the various Departments. It is all very well for a journalist to put that into the newspapers for a tag to be taken up, but it will not bear any real, critical examination as a way out of our difficulties at all, because a Department should get the money that is going to produce effectively the comfort and well-being of our people, and one Department might quite well be able to save £7,000,000 or £8,000,000, whereas another Department, instead of having a reduction of £1,000,000 or £2,000,000, might legitimately be given a good deal more money to spend than it has at the present time.
Take the Ministry of Labour, the Ministry of Pensions, and the Board of Education. I believe that, if we spent more money in those three Departments, that money would bring in a very good return to the country, and it would bring it in to-day, when we are told that we are so hard pressed as a community. I am not blind to the fact that the burden of taxation or of high rates may interfere with the carrying on of the industries of the country. I am quite well aware of that, and I am quite well prepared to accept it, but at the same time that burden is felt all the more keenly, and acts as a deterrent to the carrying on of the industry of the country, just because of the fact that so many of our economies and retrenchments in the past have begun with the working classes and have been imposed upon them. When you think of it, the economies that have to be practised by ordinary working-class families are in quite a different category from those which have been imposed upon the rentier class of the community. In the one case
it is giving up something that practically does not matter, a luxury here or there, but in the case of the working classes it is giving up something that is vital to the well-being of working class life, and because this House, to my mind, has never paid full consideration to retrenchment in connection with its distribution among the working classes and its distribution among the rentier and the better-off classes in the community, I believe that our industry is in its present parlous condition.
I want to say to the Financial Secretary to the Treasury that I hope we will not have any taking up of this sort of "Daily Mail," office-boy sort of figures of expenditure. There are some of these people, like Rothermere and Beaverbrook, who seem to think that they were born with a double dose of wisdom, that because they have exploited Sunday journalism in the way that they have done, they are able at once, just while you wait, to hand out a satisfactory financial policy for the country. My hon. Friend the Member for Gorbals (Mr. Buchanan) suggests to me that this is a different matter from reporting a divorce case, at which they may be quite skilled, or getting a Captain Gee or a Captain Coe to give good tips as to the one race.

Mr. MAXTON: The losers!

Mr. STEPHEN: Yes, the losers, but I hope the Financial Secretary to the Treasury and the Chancellor of the Exchequer are not going to embark upon, any such scheme. Finally, I want to say, in connection with this Committee of three that is going to perform wonders, that we had a Cabinet Committee dealing with the matter, but evidently they could not make anything of it, because they had their own Departments to think of, and, while they were willing to cut down the other fellow's expenditure, they were not willing that their own should suffer any diminution. Now, however, we are going to have this Committee of three super-men, who are going, to make a, general survey of the position. In this House we have a Committee on Estimates and a Committee of Public Accounts, and while we cannot possibly go into each of the minutiae of the Vote that we are passing, we have got in those Committees an examination of the various accounts, and there has never been any-
thing suggested of a very drastic nature, so far as I am aware, by those Committees. I believe the Treasury are trying to cut down all the time, and are, really exercising economy in the expenditure of the country, as any hon. Member will agree who has gone to a Minister and tried to persuade him of the advantage that would come to the country from a certain expenditure. If he has persuaded him that it is a good idea he has probably been told afterwards that the Minister has had a most terrible bout with the Treasury officials, and that the Financial Secretary and the Chancellor of the Exchequer have put on a very stiff blockade against the suggested expenditure.
Hon. Members get up in this House and talk about the possibilities of economy in connection with the Departments, because it reads well in the Press and appeals to weak minds in the community, and also allows them an opportunity of an attack upon the expenditure on social services afterwards. We have got those three super-men who are going to overlook the Departments. I hope that they will not be led astray in the same way that their predecessors were, and I would suggest to the Government that they should put it to these three very wise, distinguished individuals, this Holy Trinity, that they should make the main item in their scrutiny how to reduce this £350,000,000 interest on the National Debt, because you may talk about economy, and carve here and there, but until a Government in this country faces this burden of £7,000,000,000 or £8,000,000,000, which is imposed upon this country to-day, I do not believe you will ever get anything effective done with regard to a reduction of the burdens upon the community.

Mr. GROTRIAN: I cannot help feeling that it might be considered somewhat impertinent for a new Member to get up at this stage of the Session, and at this hour of the day, to intervene in a Debate of this character, but, at the same time, I am grateful to you, Sir, and to the House, for giving me an opportunity of saying a few words. In my humble opinion, next to peace in industry, what we want in this country is economy in administration, and I should not seek that economy by cutting down what are described as social services. Owing to
an unfortunate interjection when the Chancellor of the Exchequer was speaking, opinions have been attributed to me which I do not hold for one moment. Of course, it is my own fault, I agree, but it is not always so easy to convey all you mean within the limits of an interjection while another person is speaking. I quite agree that I brought the rebuke upon myself, but I would like to say that, so far from wishing to cut down those social services, if I could not obtain them in any other way, I would attain them by increasing the Income Tax. I think when I have said that, I have said enough to show that, at any rate, I do not hold the opinion which the late Chancellor of the Exchequer attributed to me.
I would not continue all the Departments created in the War, nor would I continue all the extravagance now going on in Whitehall in connection with these social services. I draw a great distinction between the money spent on the social services themselves, and the money spent upon the administration which is attached to them. Of course, we are all in theory in favour of economy, but I am afraid we are all a bit weak when it comes to practising it in any way in which we are ourselves interested. But I would suggest that one way in which an economy might be made, although I admit it would be quite a small one, would be by discontinuing the salaries of Members of Parliament—not all of them, but what sense is there in giving £400 a year to a man who has already perhaps £4,000 or £5,000 a year? You may say that if you cut off salaries of Members of Parliament, you will make it impossible for some people to come to this House. I would not do anything so foolish. What I would suggest is that no one should have this salary given to him as a matter of course, but if he liked to apply for it on the ground that his means were insufficient, or that it was necessary for him to have it, he should have it, but nobody else should know who applied, and who were the persons who were drawing the salary and who were not. That might not be a big economy in the way of money, but it would be a very great moral gesture to the rest of the country if we started economies upon ourselves before we tried to impose them upon other people.
I would suggest that there are other ways in which economy might be effected,
and I realise that I am going to say what may be considered a somewhat unpleasant thing. It is not meant in any unpleasant way personally. I am simply speaking of the Department, and not of the man who occupies the post. After all, we are not sent here to say either pleasant or unpleasant things, but we are sent here to say what we believe to be the truth. For instance, I ask the House, what do we get for the expenditure on, say, the Department of Mines? Can the head of the Department of Mines, find one single miner a day's work at any time? Can he stop any mine being closed down? We got on perfectly well before the War without a Department of Mines, and I suggest we could get on perfectly well again. What is it that the head of the Department of Mines can do that could not be done by the President of the Board of Trade, and so on all through? Could we not abolish the Secretary of State for Air? Could we not let the Army and Navy have their own Air Force, and look after it? Could we not go further, and abolish the Minister of Pensions, and let us have a little more money to pay to the pensioners? If you were to put most of your pensions on a permanent basis, there would be very little administrative work to be done in the office, and in that way we might save money.
And do not forget that nearly all these Departments, and a great many more I have not mentioned, were created during the War by the Coalition Government to find jobs—to put it vulgarly—for people who had been in former Administrations, and I see no reason whatever why a good many of these Departments should be continued now. I do not want to detain the House by going through all the Departments, but I am perfectly certain that as soon as you create a Department you have to have a staff, you have to have a house, and the expense is high enough in one way or another until you get these enormous figures which have been discussed in this House to-day. I must say I was disappointed with the speech of the Chancellor of the Exchequer. He holds out very little hope of really substantial economy, but I should like to warn him, so far as I am concerned, that, in my opinion, the country will never trust him again, unless he carries out the promise he has made on the Treasury Bench to secure, not cheese-
paring and fiddling little economies here and there, but really substantial economies in the administration of the country. In conclusion, I wish to thank the House for giving me this opportunity, and for listening to me.

Mr. JOHNSTON: I only want to intervene in this discussion for a moment or two, in order to call attention to an economy which might have been effected within the past week. I refer to the mines agreement. It is described as a subvention of £10,000,000 in relief of wages. I hope to show it is not a subvention of £10,000,000 in relief of wages, and when the Chancellor of the Exchequer and the Government so describe it in the Government papers, they are applying a misdescription of an expenditure of public money which I hope to show is absolutely unjustified. I listened to the Chancellor of the Exchequer this afternoon explaining where it might be possible, in the dim and distant future, to secure an economy in this service, in that service, and in the other service. Every economy immediately meant the displacement of labour, and, possibly, a further dose of unemployment. But I do not want to discuss that for the moment. What I did not hear from him was one word of explanation as to why it was that he had agreed, that he had permitted him6elf to be coerced into agreeing, to hand over £8,000,000 in profits to a coal-owning class which had undeniably, during the past decade, made extraordinary profits out of the other industries of this country. What are the facts? In Scotland, in the month of June, there was a loss per ton of 1s. 7¾d., but the Chancellor of the Exchequer did not say to the coalowners, "During the nine months in which we are considering how the coal industry can be efficiently conducted, we are going to guarantee that you shall suffer no loss." He did not say, "We will make up this 1s. 7¾ d."—not at all. He said, "We will give you Is. 7¾d. on your loss, plus 1s. 2½ d. which we will guarantee in the way of profits for the next nine months."
Then he said to the coalowners in the Northumberland area, "You lost during the month of June, say, 2s. 7½ d. per ton. We are not only going to make up that 2s. 7½d., and so guarantee that you shall have no loss during the next nine months, but, in addition, we are going to hand
you, out of the public funds, a sum of money amounting to 1s. l¼d. a ton." The coalowners in the Eastern Division, in the month of June last, made £957,000. Now there is to be a profit of £3,077,000—a profit guaranteed to the coalowners, and an hon. Friend on these benches, a member of the Miners' Federation, estimates from figures supplied to the coalminers that of the £10,000,000 subvention voted by this House yesterday, no less than £8,000,000 of it was a subvention to coalowners' profits, and the Chancellor of the Exchequer this morning never said one word in justification of that £8,000,000. He never mentioned it; it did not appear in his picture at all. £8,000,000 of this £10,000,000, or thereabouts—I am not quarrelling as to a thousand pounds— is admittedly handed over, not to wipe out losses, not to prevent the coalowners suffering losses during the next nine months, but actually to guarantee that they shall have a better rate of profit than they had in the five years before the War. If we are going to talk about economy, there is £8,000,000. I understand it is too late now to do anything, but I think it is adding insult to injury to describe this £10,000,000 as a subvention in relief of wages. Only £2,000,000 out of the £10,000,000 is going to the collieries and £8,000,000 is going to the coalowners. What about royalties? There is no subvention for them. Why not? Is it not the fact that the coal pits have got to provide the means, and the coalowners have to contribute rather more than £6,000,000 to royalties? Is that not, therefore, a subvention to the royalty owners? The royalty owner will not suffer a penny reduction. There is to be no economising on his expenditure.
The Chancellor of the Exchequer never said a word about the fortunate investor who had invested his money in war loan when the £ was worth 11s. Now it has gone up by one expedient and another, by gold standards and the like, and has been driven up on the American exchanges to almost 20s. That has now put up the purchasing value of the British pound, it ceases to be 11s. and becomes something in the neighbourhood of 20s. There is no proposal that this fortunate shareholder in British war-loan should suffer pari passu a reduction because of the increased purchasing power of his £: there is no proposal of that kind what-
ever. All the economies that are to take place, according to the Chancellor of the Exchequer and according to the hon. Gentleman who spoke from the Liberal benches in initiating this discussion, are to take place at the expense of one kind of Civil Servant or another. I am not arguing against some of these proposals. There must inevitably be action taken in these Government Departments. Anybody in his senses would be desirous of cutting out all waste, and the preventing of inefficiency. It is however, a great broad avenue along which this House is going to travel that has been expounded from the various benches this afternoon, and that some of us, at any rate on these benches propose to do our utmost to prevent.
Further to cut down wages is further to cut down the purchasing power of the people, and the worse the conditions of affairs will be in this country. There is absolutely no escape in that way. If you were to cut off parasitic bodies—well and good. Let us go for the landowner. Let us go for the interest drawer. Let us go for the people who do nothing to help production. Let us do that, and not cut and sap away, as we have been doing during some period or other of this Session, the purchasing power of the poorest section of the community. I do not want to take up any further time. I simply want to repeat again my protest against the use of any State paper or in any State document of the information that £10,000,000 voted yesterday was a subvention in aid of wages. It is no such subvention. I trust that no hon. Member of this House, speaking during the Recess, will not attempt to mislead the public in the way that this House has been misled by the paper issued by His Majesty's Government.

Sir HARRY FOSTER: Am I right, Mr. Speaker, in assuming that this Debate automatically comes to an end at three o'clock?

Mr. SPEAKER: Yes.

Sir H. FOSTER: I only desired—perhaps I may be able on the Adjournment Motion—to ask for some explanation from the Secretary of State for the Colonies in connection with our administration of affairs in Palestine. I content myself at the moment—I do not think it has been
done yet in this Debate—of entering a protest, and expressing my very great regret, and I am sure the regret of Members on both sides of the House, regarding the announcement made by the Prime Minister two days ago with respect to the marriage allowance of naval officers. This House voted a substantial sum early in the Session to enable that marriage allowance to be made to the naval officers. We understood that the matter was still being discussed until two days ago the Prime Minister in answer to questions from various parts of the House made the announcement of the Government as follows:
The Government have made a most careful and prolonged inquiry into the relative position in pay and allowances of all kinds of officers of the three fighting services. They have reached the conclusion that the position of naval officers, whether married or single, taken as a whole, is not inferior to that of officers in the other two services. In these circumstances they consider that no case has been made out for granting the additional allowance.—[OFFICIAL REPORT, 5th August, 1925; col. 1345, Vol. 187.]
The Prime Minister was challenged on the subject by various Members, and asked whether it was not a fact that the naval officers alone amongst the services, either men or officers, do not draw marriage allowances. The reply of the Prime Minister to that was this:
To answer that question fully would be entering into Debate. That is a fact; and it is also a fact that at the time when the pay was settled a few years ago all these considerations were taken into account. Anyone can raise it on the Adjournment or, if there is time, on the Appropriation Bill.—[OFFICIAL REPORT, 5th August, 1925; col. 1345, Vol. 187.]
There was no time, however, on the Appropriation Bill, to discuss the matter at all adequately, or, indeed, at all, but I do wish—and in this I think I am voicing the feelings of a great many people both inside and outside this House—to say that the decision of the Government has not only caused great disappointment, but that it is much to be regretted that if the Government had not already made up their minds on the subject, that false hopes should have been allowed to have been fostered. That this House should have been led to vote the money, and then afterwards, and after months of discussion, private discussion amongst the members of the Government, suddenly, when there is no time to discuss the matter in this House, that an announce-
ment should be made, and that these hopes have been raised only to be dashed to the ground. Personally I have had more than one letter expressing the grave disappointment, and indicating the difficult financial position in which some of the officers have been placed by reason of having had their hopes raised, and then dashed to the ground. There will be, doubtless, either on the Motion for Adjournment, or at some other more convenient time, an opportunity of discussing the matter fully in this House. All I can do at the moment is to express the very deep regret and sense of disappointment that the hopes of these officers having been raised so unnecessarily, with every indication that those hopes should be fulfilled, should now be dashed to the ground as they have been.

Mr. TINKER: I desire to ask the Financial Secretary to the Treasury for some explanation on the White Paper dealing with the coal industry. So far as I can see the thing, it seems to be some system of pooling which is to take place. If a district makes more than 1s. 3d. profit on the ton, they have to hand over the surplus to the Treasury. The point of difficulty that I want to understand is this: Does that apply to collieries, firms, or districts? For instance, if a district is able to show that it has made more than 1s. 3d. profit, I take it that it has got to hand over the surplus to the Treasury. Let me take a district that is able to make more than 1s. 3d. Take, for instance, a district that we have with 30 collieries. Five of those collieries may make a surplus of 2s. 6d. per ton. The other 25 may have a deficit. But, taking the whole of the district together, that will show a loss; yet, at the same time, five of those firms have the 2s. 6d. per ton surplus. Do I take it that the Treasury will claim from the five colliery firms the excess of 1s. 3d. per ton? There is in the district a number of collieries which have not been able to pay their way and have not got anything to hand over. If that be the case, there is no equity at all in the matter.
The district that is able to pay its way may make 1s. 4d. per ton, and must hand back to the Treasury 1d. per ton, yet in a poorer district where some of the better of the collieries have made a profit they
are not called upon to pay anything back. I claim that in a matter like this, seeing that the Government is called in to help the mining industry—I do not say a word about that, I am entirely with the Government in coming forward at a time like this—but I do say that in a matter of this kind, that any colliery that can make a profit whether the district can pay or not, ought to hand the surplus over to the Government. If pooling is to take place let it be uniform all the way round. I am drawing the attention of the Treasury to this point because I think it has been overlooked. We who attend here at the House of Commons shall be expected to be able to give some lucid explanation to our people when we explain what has happened here. That is the point, and the only point that I want explained. If the right hon. Gentleman has the time I should like him to clear the matter up, the point as to whether it is the districts or the individual firms that have got to hand over the surplus.

The FINANCIAL SECRETARY to the TREASURY (Mr. Guinness): The details of this matter are somewhat complicated. They affect many mines and therefore, the Secretary for Mines is more closely concerned with them than is the Treasury. I think, therefore, it would be undesirable for me to enter into any interpretation upon these technical points. If, however, the hon. Gentleman will be so good as to put on paper exactly the points which he wishes to have answered, I will see that they are handed to the Mines Department, who, I doubt not, will give him all possible reasonable details.

Mr. JOHNSTON: Is it not the case that it was explicitly stated from the Treasury Bench yesterday that the new agreement in no way whatever affected the Exchequer in this sense: that it means that the owner of the pit making 2s. l0d. per ton in no way pays in one copper; he is allowed to make whatever he can?

Captain BENN: I trust that the taxpayer, so far as he takes any interest in our proceedings here, will note the speech of the right hon. Gentleman the Financial Secretary, He represents a Department which is asked to grant £10,000,000, and he cannot explain, and cannot tell us—or he will not tell us—as to the application of this £10,000,000. As my hon.
Friend the Member for Leigh (Mr. Tinker) pointed out, it is going to be given to collieries which are making a profit, and in addition to the profit. The Financial Secretary's speech is of quite an illuminating character, and I would ask hon. Members to note that there is no guarantee of control, or any guarantee that this money will not go into the hands of those it ought not to go into.

Question, "That the Bill be now read the Third time," put, and agreed to.

Bill read the Third time, and passed.

Orders of the Day — RUSSIA AND CHINA.

Motion made, and Question proposed, "That this House do now adjourn."— [Commander Eyres-Monsell.]

Mr. PONSONBY: I desire to draw the attention of the House and of the Government to points concerning our foreign relations which, I think, are of very great importance, in which we are now concerned, and which also ought to have the attention of the Government and the House. I am sorry that the right hon. Gentleman the Foreign Secretary has been unable to be present to-day, because in addition to asking for some information, I shall ask also for a statement of policy. I know my right hon. Friend the Under-Secretary for Foreign Affairs may find it rather difficult to reply. It would have been better if the Foreign Secretary had been able to be present with us.
The first question that I want to raise is that of the relationship of this country and Russia, or to put it more accurately, the relationship of His Majesty's Government with the Soviet Government. It has been noticeable ever since the advent of this Government to power that there has been an estranged relationship between the two countries. I would like to lay down two propositions with which I do not think anybody would disagree.
3.0 P.M.
The first is that strained relations between the two countries, if allowed to remain for too long a period, are bound to grow worse and lead to eventual trouble. I do not think I need give any illustrations of that, because I think it is a self-evident proposition. The second pro-
position I would put before the House is that the desire for European recovery, and for the establishment of durable peace between the nations, will inevitably be frustrated if any one nation, especially so potentially powerful a nation as Russia, is deliberately excluded from friendly intercourse. During the nine months in which the present Government have been in office nothing at all has been done. The Government turned down the Treaties that were signed last August, but during nine months they have not even had the courtesy to tell the representative of the Soviet Government in London the points to which they objected in those Treaties. They have repeatedly said in this House that they were waiting for propositions from the Soviet Government. The Soviet Government's propositions are contained in the Treaty of August last, and it was for His Majesty's Government to say in what respects they disagreed with those Treaties, in order that negotiations might be reopened.
I think many will agree that the tone of the Foreign Secretary, whenever he has been confronted with any questions connected with Russia, has been always one of studied disdainful indifference and hardly - concealed unfriendliness. On every occasion he has, more or less, snubbed those who have ventured to suggest that the renewal of normal relations with Russia was advisable, and so it has gone on. He has got nothing to complain of as to our troubling him, except with occasional questions, and he has been able to pursue his frigid indifference to the necessity of renewing friendly relations with Russia, till at last, on 6th July, he informed this House that our relations with the Soviet Government were critical and dangerous. He was surprised after that that there was something of a scare. The scare was caused by the speeches of the right hon. Gentleman and other members of the present Government, and by the tone of the replies of the Foreign Secretary himself in this House. The Minister for Labour, in a speech on the Appropriation Bill in this House the day before yesterday, said:
It seems to be thought by many hon. Members opposite, and by those who sympathise with them, that trade with Russia is stopped or hindered by action taken by the British Government. I can assure them that that belief is based on a complete misapprehension of the facts."—[OFFICIAL REPORT, 5th August, 1925; col. 1441, Vol. 187.]
The right hon. Gentleman was entirely wrong in that conclusion. Our trade relations are governed very largely by our political relations. That answer of the Foreign Secretary on 6th July had an immediate effect in one particular instance that has been brought to my notice. An English co-operative society, which was on the point of concluding an agreement for the establishment of an Anglo-Russian grain company, for the sale of grain, found that there were political obstacles in its way, and could not continue with the business. It stands to reason that when any commercial body is on the eve of coming to an agreement with a foreign country, and from Parliament and from other authoritative quarters there come pronouncements which show that our relations with that particular nation are not friendly, are strained, are spoken of as dangerous and critical, that there is no business to be done. Our trade with Russia has been frequently frustrated in that way. The result is that the trade is going elsewhere. The trade with Italy is on the increase, and I see negotiations with France are being renewed, and that they are coming to an agreement. Meanwhile our claimants, our creditors, though they may not have been pleased with the treaties of August last, are very much more disappointed now when they find that no attempt is being made to meet their claims, and that no advance at all is being made by the present Government.
What is at the back of this attitude towards Russia and the Soviet Government and Bolshevists? I think there are four reasons, and that they really comprise the whole situation. First of all, there is the argument, "If you cold-shoulder them for a long enough time, it is only a question of time for the Soviet Government to fall." I do not believe that that is at all a wise way of looking at the situation. The Soviet Government have been in power since 1917. They had overcome the most abnormal obstacles both from within and from without. They have lost their great leader, and yet, in spite of that, they are now reconstructing their country, and they are the only Government that have stabilised their currency without the assistance of a foreign loan. I think those who bank in the fall of the Soviet Government are making a great mistake. The second
reason is that there is this feeling in the minds of a greet many people: "Leave the Bolshevists alone, and sooner or later they will come cap in hand, and then we shall be able to get far more favourable terms than the Labour Government got in August, 1924." I think that is very improbable. So far as I can see, the Soviet authorities have no desire to come to us cap in hand. If we do not want friendly relations, if we do not want trade with Russia, they will go elsewhere; but the estrangement of a large country like that affects us every bit as much as it does them.
Now I come to the third reason, and I think that is the most potent reason. It is that nothing should be done to mitigate the enormous electoral advantage of an anti-Bolshevist cry. There is no doubt that is a supreme asset. At the Conservative headquarters they have got their Bolshie bogies stacked by the dozen, by the hundred, by the thousand for the next Election. It was a most valuable asset to hon. Gentlemen opposite, and I do not think they will be allowed to show any sort of friendliness to Bolshevists during the next four years, in case that very valuable card should be withdrawn from their pack when the next Election comes. The fourth reason is, "It is impossible to have friendly relations with a Government which are directly responsible for anti-British propaganda." [HON. MEMBERS: "Hear, hear!"] Yes, I thought that would receive a cheer from hon. Gentlemen opposite. I want to go into this question of propaganda rather particularly. Another hon. Member from these benches will go more particularly into the commercial and trade side of the question, and I want to deal with this political side. There is no question about it that the existence of the Soviet Government is in itself a menace to the Western capitalist Governments in other parts of the world. That the Third International have propaganda I do not doubt for a moment—they have. That this Government or any Government are going to close down the propaganda of the Third International is out of the question altogether, but if we are on friendly relations with the Soviet Government and with Russia we get a very much better chance of making representations in a friendly way, and of re-
straining their propaganda, if it is really against us, and altogether acting in cooperation with them—a very much better opportunity of doing useful work than if the attitude is an unfriendly, frigid, disdainful attitude.
But there is an amount of gross exaggeration about this propaganda which must be used, obviously, for purely party purposes. The Home Secretary, in a speech only last Saturday, said he was convinced that Zinovieff was still in communication with people in this country and was using all his arts to destroy the Empire. It is all very well for someone at the street corner to make a remark of that sort, but when the Home Secretary says that, we think he has got some proof of it. What we have always been asking for, and what we never get, is proof positive of this anti-British propaganda. It is quite well-known that in Berlin and in Vienna there have been factories for forgeries. People have been found with the imprint of notepaper headings imitating the Soviet Government headings in their possession, with a view to circulating false documents, and pretending that they come from headquarters in Russia. We have not been able to get any proof positive, of this propaganda.

Major-General Sir ALFRED KNOX:: Read the Russian Press.

Mr. PONSONBY: The hon. and gallant Member says, "Read the Russian Press. "I believe they read our Press, and the unfriendly articles against Russia in our papers are infinitely stronger than any articles against us.

Sir A. KNOX: The Russian Press is a Government Press.

Mr. PONSONBY: When we ask for proof positive, we are told to wait. We are told the Secret Service cannot divulge these things. Frankly and honestly, at this time of day, I think we could dispense with the Secret Service. I do not think I am the only person who thinks that the Secret Service is a very unreliable source of information in peace times. I am not the only person and we are not the only party who think that, and that opinion is not only held outside the Civil Service itself. We should like some proof. We should like the Home
Secretary or the Foreign Secretary to come to us and say, "Such and such a document was found and it has been proved to be authentic." But the only things we get are vague insinuations, and statements that the source cannot be divulged. It was laid down in the Trade Agreement that these matters should be dealt with. Article 13 provides that
Nevertheless it is agreed that before taking any action inconsistent with the agreement, the aggrieved party shall give the other party a reasonable opportunity of furnishing an explanation.
This was after propaganda in Persia and Afghanistan, and a memorandum was handed to M. Krassin, and his reply stated that the Soviet Government would be quite willing in the event of any further infringement of their pledge that the cases should be immediately brought to the attention of the Governments concerned, rather than such incidents should be allowed to accumulate. That was the statesmanlike way in which to deal with this matter, but the Foreign Secretary has not brought any instances to the notice of the Soviet Government, he has made no complaints, and he is merely allowing these instances to accumulate That is rather a curious way of dealing with this matter, and surely it would be better to bring these cases before the attention of the Soviet Government. That, however, is not the view of the Foreign Secretary, because on the 27th July he said:
I cannot think that I am called upon to give details of particular occasions or disclose the information which is in mypossession."— [OFFICIAL REPORT, 27th July. 1925, col. 15. vol. 187.]
I will now pass as rapidly as I can to the other point to which I desire to draw attention. I want the Under-Secretary of State for Foreign Affairs to give us some information as regards the situation in China. The exchange of ratifications of the Treaty of 1922 has taken place at Washington, but we have had no statement from the Government saying exactly what is going to be done in regard to China. It is a long time since the 30th May when the Shanghai incident took place, and all the information we have had has been contained in a speech made by Lord Balfour in another place, which the "Times" characterised as showing a depressing detachment, and treating the problem as something remote. This problem is one that may shoulder and blaze up
into something extremely dangerous, and the Government are showing a supine inertia, and are taking no action in the matter. They seem to have an incorrigible habit of allowing a situation, both at home and abroad, to come to a head before taking any action at all. We have seen accounts of the evidence taken at the inquiry in China into the case of the arrested students at Shanghai. Then there was the Report of the Diplomatic Commission at Shanghai, and we have lately got a full account of the proceedings showing that the French Minister withdrew from that Commission because the British Government took a view opposed to the rest of the Diplomatic Commission, and the whole story is set out in the Shanghai papers.
I should like the Under-Secretary to say whether the accounts we have read, which bring rather a grave indictment against the attitude adopted by His Majesty's Government and the actual instructions they have sent out to China, are to be relied upon, and if they are false we should like to know from the right hon. Gentleman the real facts of the case. This report tells us that the Diplomatic Commission found that the police commandant should be dismissed, that the muncipal council of Shanghai should be censured, and that the police inspector should be tried, and if necessary punished according to law. Now these are extremely serious charges, and we should like to hear why His Majesty's Government gave instructions that those findings were not to be carried out by the Consular body which is in supreme control. I must say that I think it is of enormous importance for the credit and honour of this country that the Government should not by their action show, or pretend, that they are unwilling to face the truth in this matter, and are desirous of shielding those whom an impartial committee considers to be guilty. Our trade has been adversely affected, and nothing has been done, and I think it is time that the Government took a bold initiative, and took some steps to see that a full inquiry is made by an impartial tribunal set up to investigate the matters at Shanghai, and I hope the Government will not shirk the issue, but face the truth and show the Chinese that we are ready to see that justice is done.
In the next place, I wish to refer to the exchange of ratifications of the Treaty of 1922 which makes it possible
for an international Conference to be held. I think His Majesty's Government ought to take the initiative in seeing that that Conference is called together at which the whole question of extra-territorial rights could be discussed, as well as the Customs tariff question and other points which may be raised by the Chinese. I do not want to go back to the question of Bolshevik propaganda, or to the suggestion made in this connection that the disturbances in China are due to this cause, because that has already been disproved. It is true that some Communists were there, but to say that this movement is due to Communist propaganda is farcical in the extreme. This trouble has been going on ever since the Western exploitation of China commenced in 1840, and the breaking-point has been reached on account of the way the Chinese have been treated as being inferior people.
The only thing we seem to have taught the Chinese is how to use arms, and we have forced upon them some of the worst faults of our industrial system. I do not think the Chinese have anything to be very grateful for in this connection, and is it to be wondered at that they are now feeling sore and troubled at the present situation? I hope in this connection the right hon. Gentleman will not fall back on the excuse that there is no stable Government in China, and no competent authority to speak for China, because that is mere subterfuge to shield us from the obligation of playing our proper part. If the Western Powers, and more especially Great Britain, desire to deal honestly by China, it will not be long before a strong Government will rise up in China, and then they will be in a better position to deal with their own internal affairs.
All these questions are closely connected with one another. The Foreign Secretary from his watch-tower at the Foreign Office can see over the whole field of international affairs, and he knows how important it is that our nation, together with the various countries in Europe, should be uniformly friendly, and if any corner of the field is neglected it must have a deleterious effect upon the whole. If we, by our policy, estrange the whole of the vast population of China, and if we are rousing up, for what reason I do not
know, a sort of suspicious feeling against Japan, the struggle in the future will not be between the nations of Europe for the balance of power, between groups of nations but between the two great continents of Europe and Asia. These things have small beginnings, and the unfortunate action of to-day may culminate in great catastrophes years hence. We must not forget that the war fever still exists, and on this side of the House at any rate we consider it necessary to draw the attention of the country to our relations with those two potentially powerful nations. We believe that so long as our relations with them are unfriendly as they are now, and so long as His Majesty's Government do nothing to improve those relations, we think that this House and the country should have fair warning, and should have full intimation as to how matters stand.

Sir A. KNOX: I venture to intervene in this Debate for a short time because I have had some knowledge of one of the countries to which the right hon. Gentleman who has just sat down has referred, having spent nearly nine years in Russia. Out of that time I spent only two months under the Soviet regime. I always had a keen regard for the Russian people, and I loved the country, but I think we should be particularly careful in this House when considering questions relating to Russia not to confuse the present regime with the great Russian people. Hon. Members opposite are continually pressing for closer relations with Russia with the ostensible object of improving our trade and finding a solution for unemployment in this country.
Of course one rather doubts that they really want to have trade relations with a form of Government which is considered to be the greatest Socialist experiment the world has ever seen, but we call it by a shorter and more appropriate name. We are told that hon. Members opposite want Russia to buy more of our goods. The Minister of Labour pointed out the other day that in 1924 we brought from Soviet Russia £20,000,000 worth of goods. Soviet Russia took from us, including re-exports, £11,000,000, and that left them with a favourable balance of £9,000,000. Why could they not spend that £9,000,000 here? I submit that a certain proportion of that £9,000,000 was spent in invisible
exports, in subsidies to communistic propaganda in many countries, and especially in the British Empire. The Foreign Secretary a few weeks ago said that he had definite information of Soviet activities in China. If hon. Members opposite really want to extend our trade in Russia, especially in Soviet territories, the right way is to approach the Soviet Government and induce them to modify their methods. At present they have all the foreign trade of the country in their hands, and our own traders cannot get at the people in Russia who desire to buy the goods which we can supply. A friend of mine who went out to Russia in order to get in touch with the fur people found that he could only do so through the Soviet authorities, and then the prices he was asked were such that it would not pay him to bring the furs into this country.
Take the case of the tea trade. Before the War we sent 200,000,000 lbs. of tea annually into Russia. Anyone who knows the habits of the Russian people know that they cannot live without tea. It is a necessity here, but in Russia it is far more of a necessity. We sent only 3,500,000 lbs last year, and I can contend that if our traders could get into touch with the Russian people our trade would prosper there. Hon. Members opposite are no doubt concerned with the unemployment question here, and if they want to help it they had better go to their friends in Russia and try to get them to modify their communistic system.

Orders of the Day — MESSAGE FROM THE LORDS.

That, they have agreed to,

Consolidated Fund (Appropriation) Bill, without Amendment.

Orders of the Day — ROYAL ASSENT.

Message to attend the Lords Commissioners.

The House went, and, having returned—

Mr. SPEAKER reported the Royal Assent to,

1. Appropriation Act, 1925.
2. Greenwich Hospital (Disused Burial Ground) Act, 1925.
3. Teachers (Superannuation) Act, 1923.
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4. Therapeutic Substances Act, 1925.
5. Allotments Act, 1925.
6. Public Works Loans Act, 1925.
7. Diseases of Animals Act, 1925.
8. Summer Time Act, 1925.
9. Telegraph [Money] Act, 1925.
10. Seeds (Amendment) Act, 1925.
11. Wireless Telegraphy (Explanation) Act, 1925.
12. Roads Improvement Act, 1925.
13. Unemployment Insurance Act, 1925.
14. Widows', Orphans', and Old Age Contributory Pensions Act, 1925.
15. Public Health Act, 1925.
16. Honours (Prevention of Abuses) Act, 1925.
17. National Library of Scotland Act, 1925.
18. Dangerous Drugs Act, 1925.
19. Air Ministry (Cattewater Seaplane Station) Act, 1925.
20. Ministry of Health Provisional Orders Confirmation (No. 4) Act, 1925.
21. Ministry of Health Provisional Orders Confirmation (No. 5) Act, 1925.
22. Ministry of Health Provisional Orders Confirmation (No. 6) Act, 1925.
23. Ministry of Health Provisional Orders Confirmation (No. 7) Act, 1925.
24. Ministry of Health Provisional Orders Confirmation (No. 8) Act, 1925.
25. Ministry of Health Provisional Orders Confirmation (No. 9) Act, 1925.
26. Ministry of Health Provisional Orders Confirmation (Water) Act, 1925.
27. West Hartlepool Corporation (Trolley Vehicles) Order Confirmation Act, 1925.
28. Irvine Burgh Order Confirmation Act, 1925.
29. Victoria Infirmary of Glasgow Act, 1888 (Amendment) Order Confirmation Act, 1925.
30. Stock Conversion and Investment Trust, Limited, Act, 1925.
31. Hoylake and West Kirby Urban District Council Act, 1925.
32. Burnley Corporation Act, 1925.
33. Bath Corporation Act, 1925.
34. Middlesex County Council Act, 1925.
35. Slough Trading Company, Limited, Act, 1925.
36. Stockton-on-Tees Corporation Act, 1925.
37. Oldham Corporation Act, 1925.
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38. Mansfield Corporation Act, 1925.
39. Mid-Glamorgan Water Act, 1925.
40. Newbury Corporation Act, 1925.
41. London, Midland and Scottish Railway Act, 1925.
42. Blackpool Improvement Act, 1925.
43. Ipswich Corporation Act, 1925.
44. Leek Urban District Council Water Act, 1925.
45. Scarborough Corporation Act, 1925.
46. Colonial Bank Act, 1925.
47. Barrow-in-Furness Corporation Act, 1925.
48. Uckfield Gas and Electricity Act, 1925.
49. Nottingham Corporation Act, 1925.
50. Mersey Tunnel Act, 1925.
51. Boothferry Bridge Act, 1925.
52. West Ham Corporation Act, 1925.
53. West Cheshire Water Board Act, 1925.
54. Clydebank Burgh Extension Act, 1925.
55. Surrey County Council Act, 1925.
56. Darlington Corporation (Transport, Etc.) Act, 1925.
57. New Shoreham Harbour Act, 1925.
58. Hartlepool Corporation Act, 1925.
59. London County Council (General Powers) Act, 1925.
60. Manchester Ship Canal Act, 1925.
61. Bradford Corporation Act, 1925.
62. Wolverhampton Corporation Act, 1925.
63. Walsall Corporation Act, 1925.

Orders of the Day — RUSSIA AND CHINA.

Question again proposed, "That this House do now adjourn."

Sir A. KNOX: (continuing): I was trying to prove that, if you really want better trade relations with the Soviet, what you ought to do would be to try to induce the Soviet Government to adopt more Western methods. The previous speaker said that he wondered what was behind all this, and he ventured upon four things which, he imagined must really be at the back of our minds to prevent us from receiving the Soviet emissaries in this country with open arms. The one upon which I understand he was inclined to put most weight was that we found that this anti-Communist movement was a very important point for us in Elections. I think there is no doubt that the people of this country, at the last
General Election, gave with no uncertain voice their verdict against any truck with the Soviet Government. Therefore, I am surprised to find the hon. Gentleman now proposing that we should go back to the arrangement which was put down at the last Election. I would suggest to him another and a fifth reason in our minds, which really makes the average Englishman totally averse from any close dealings with the Soviet Government as at present constituted. After all, we are democratic in this country. We here are elected by the majority of the people, and are sent here to carry out the will of our constituents. The hon. Gentleman knows that in Russia there is no democratic Government at all.

Mr. DALTON: When was there?

Sir A. KNOX: It is government by one party, and there is no secret ballot. That party, the Communist party, rules the Third International and also rules the whole Government. No one can hold any office in the country who is not a Communist. Here, from time to time, we may have a Labour Government, or a Conservative Government, or, perhaps, a Liberal Government, according to the will of the people, but in Russia, where 90 per cent. of the people are peasants and anti-Communists, the Government is consistently Communist. Then there is the continued anti-religious propaganda —[Interruption]—and there are the continual massacres of people without trial. Only to-day, in the "Times," there is reported the murder—I call it murder, because it is nothing else—of 58 new unfortunate victims. Is it not perfectly natural that Englishmen who are really Englishmen, who have not gone mad with political prejudice, should have a certain feeling against close relations with any Government like that?
The hon. Gentleman mentioned China, about which I should like to say a few words. I do not know China at all. I was only there for six weeks—perhaps a little longer than the trade delegation spent in Russia. I had not the advantage of three experts with me who knew a little of the language, who would have enabled me to publish a valuable volume when I got back, and who would have written that volume for me. I went there as an ordinary tourist in 1922, and one thing I
noticed was that the people were not anti-British, as far as I could see. There was a lot of propaganda against the Japanese, but not against us. The Soviet envoy, Karakhan, arrived in Pekin in 1924. Of course, I do not for a moment say that the whole of the anti-British propaganda in China is engineered by the Soviet, but what I maintain is that the direct anti-British propaganda comes from Moscow. Why is it against England, and not against France, or against Italy, or against Japan? Why is England the arch-enemy? Anyone who has been in China will tell you that the English people have always had the best relations with China. I saw that myself. I think there are certain indications that point to Moscow having deliberately prepared this movement in China. I have mentioned Karakhan, and I should like to quote one or two extracts from Russian newspapers which, as I would remind hon. Gentlemen opposite, are not like British newspapers. They cannot publish anything except at the will of the Russian Government. The "Pravda," on the 5th September, reported that:
Instructions had been sent to comrade Tomski"—
whose real name is Mikhel Izbitski. He is the son of Mordecai Izbitski. He was not christened, but was given the names of Mikhel Yosel.

Mr. J. JONES: On a point of Order. Are not Members of the Russian Government entitled to change their names? Have not Members of the British Government changed their names, and has not even the King himself changed his name?

Sir A. KNOX: I am not making any reproach against Comrade Tomski, but I would like to tell the House why he took the name of Tomski. [Interruption.] He simply took that name—[Interruption].

Mr. SPEAKER: Hon. Members will please address me, and not one another.

Mr. J. JONES: I want to address you, Sir, and to ask this question as a point of Order. Is it in Order for a Member of this House to refer to a Member of another Government is such disrespectful terms, as though he had changed his name from some ulterior motive? The Ring of this country has changed his name, and no one thinks any the worse of him for doing it

Mr. SPEAKER: There was nothing disrespectful. The hon. and gallant Member who was speaking particularly disclaimed anything of that kind.

Sir A. KNOX: I am sorry if I ruffled the feelings of hon. Gentlemen opposite. Comrade Tomski is not a member of the Soviet Government at all. I only wanted to mention that at one time he resided, for the good of the State, for a certain number of years in Tomsk, and took his name from that place. I think, now that he has come over to this country to London and to Hull, he, perhaps, ought to change his name to Hullski or Londonski.

Mr. BECKETT: Is it not the case that if he changed his name there was ample precedent for it, because he married a rich wife?

Mr. SPEAKER: That has nothing to do with the subject of the Debate. At the same time, I would suggest that the hon. and gallant Member should devote himself to the point.

Sir A. KNOX: I was saying that the "Pravda," on the 5th September, reported that instructions were sent from Russia to Comrade Tomski to form in England a "Workers' Hands-off-China Society." That was done with a certain object. Then there was a speech by Comrade Rykov, an important member of the Russian Government, in December, in which he said:
We will live to see that, through the development of the revolutionary movement in China, some British interests will receive a severe set-back from the Chinese.
4.0 P.M.
Then you get Comrade Trotsky rubbing his hands over the state of things in China. I think we have ample proof there that the Government with which the right hon. Gentleman desires to have still closer relations are not keeping up to their part of the agreement made in 1921, but are really extending their anti-British propaganda to Asia. The right hon. Gentleman mentioned the speeches of the Home Secretary. We on this side welcome those speeches, because they show that we have a Government that is out to protect the people of this country against foreign propaganda, and we only wish speeches of that kind were followed up by more action. We had a mandate
from the country at the last General Election to deal with this question, and I hope it will be dealt with as it ought to be.

Mr. TAYLOR: The hon. and gallant Gentleman who has just sat down says the Government received a mandate from the country to take more extreme action against Russia. I believe, if the total votes cast for Liberal candidates, who advocated the extension of the Trade Facilities Act and the export credit scheme to Russia, are added to the total votes cast for Labour candidates, they exceed the total number of votes polled by the Conservative Government. The hon. and gallant Gentleman repeated a statement that has been made by the Foreign Secretary, the President of the Board of Trade, the Parliamentary Secretary to the Overseas Trade Department and other Members of his party that there was a trade balance in this country favourable to Russia with which Russia could, if she so desired, substantially increase her purchases of British goods without any question of the extension of State credits by this country. The policy of the Government is, to my certain knowledge, strictly responsible for thousands of working-class people tramping the streets to-day. I say deliberately, with knowledge of the facts, that working-class people are being sacrificed to the prejudice of the ruling class of this country, and I resent the implication that any man who seeks to promote closer and better relations with Russia is necessarily antagonistic either to his own country or to the development of trade between this country and other parts of the Empire. There are some of us who believe that the best interests of our country will be observed by promoting economic co-operation and goodwill with all countries, and not merely with countries whose political views and whose political form of government we happen to agree. The unsatisfactory state of Anglo-Russian relations is preventing the development of trade between this country and Russia, which would take place, altogether apart from the question of any Government credits. The basis of Anglo-Russian trade, like any other trade, is confidence. Without confidence long-term credits will not be given. That is the key to the whole problem. The present attitude of the Government, instead of restoring confidence, is creating for the
exporters of goods to Russia an additional political risk over and above the ordinary commercial risk which, they cannot estimate.

Lieut.-Colonel HENEAGE: How can we on this side, or how can any Government, have confidence in the Russian Government?

Mr. TAYLOR: The short answer to that is that the present Russian Government have never failed to meet any obligation they have entered into with this or any other country. I know it to be true that the amount of credit that would be extended to Russia by firms who in pre-War days were engaged in the Anglo-Russian trade has been restricted and reduced because of the change of Government. Anglo-Russian trade expanded during last year because the relationships between the two countries improved, and the risk of a political quarrel was much less than it has been during the early part of this year. Therefore the failure to straighten out outstanding questions, the repeated statements of Tchitcherin to the effect that he is willing and anxious to re-open negotiations, and the repeated refusal of the Government, have created a situation of uncertainty which is a very great drawback to those who are doing their best to bring about economic cooperation between this country and Russia. It is no longer a question whether Russia can buy goods abroad or not. She is buying them. The thing we have to consider is whether they are to be bought from this country or from our commercial competitors. In 1921 the total imports, exports and re-exports between Russia and this country were £6,000,000. In 1922 they were £16,000,000, in 1923, £14,000,000, and in 1924, £31,000,000. The whole of that trade between this country and Russia has been done, and I challenge anyone inside or outside the House to say the Russian Government has ever failed to meet any obligations it has contracted, as far as trade is concerned. In 1921 the total foreign trade of Russia was £20,000,000. In 1924 it had risen to £100,000,000.
I want to make a statement with reference to a speech of the Prime Minister last October, in which he said in his opinion the best thing that could happen
for this country was the development of Russian trade, as and when it became possible, to be done by Germany. I believe at the back of the Prime Minister's mind is the idea that Russia is to become the overspill for the surplus production of Germany, and that we shall get our return from the payment of reparations. That is all very well for the thoroughly comfortable people in this country who live on incomes, but it is a very unfortunate thing for the thousands of working-class people who depend for their living, or did in pre-War days, upon the manufacture of exports to Russia. The Prime Minister told the Trade Union Congress delegation that met him in June that Russia never had been a great customer of this country, and he spoke in rather disparaging terms of the importance of Russia to this country from the trading point of view. He spoke as if Russian trade was static. As a matter of fact, before the War it was increasing and developing every year. In 15 years, from 1895 to 1910, Russian trade increased by over 50 per cent., and so far as the machinery industry is concerned, particularly the agricultural machinery industry, Russia and Germany together took 41 per cent. of the total output of the trade in my constituency. Year after year, from £600,000 to £700,000 worth of agricultural machinery was exported to Russia, which was paid for on a long-term credit basis.
Let us examine the argument which has been used by the Government, and which was repeated by the last speaker, that because Russia exported to this country £20,000,000 worth of goods during 1924 and only bought from us £11,000,000 worth including re-exports, that left her with a trade balance of £9,000,000 in this country, and that, therefore, there is no necessity to extend the export credits scheme or the Trade Facilities Act to Anglo-Russian trade. If it is true merely as a statement of fact that a favourable trade balance means that there is available in this country credit for the purchase of British goods, I should like to draw attention to the fact that Denmark sold us £48,000,000 worth of goods during 1924 and only bought £25,000,000 worth of our exports. Czechoslovakia enjoys the advantages of the Trade Facilities Act. She bought from us last year something over £l,000,000 worth of goods and exported to us
£13,000,000 worth of her products. If the question is as simple and straightforward as that, perhaps someone will explain why Denmark and Czechoslovakia do not take out of this country all the credits in the form of British goods that they raised by their exports. The Government, the Prime Minister, the Foreign Secretary, the President of the Board of Trade and the Minister of Labour, who used the same argument a day or two ago, know perfectly well—they have had the training and they have the intelligence—that transactions in foreign trade are not settled in that simple way. Before the War, Russia always exported to this country more than she imported from us, but, on the other hand, she bought from Germany far more than she sold. Germany was a good customer of British India. Russia was a good customer of India and particularly of the East Indies. The credit which Russia has raised by her imports into this country has been used in a number of ways which prevent its being used for the purpose of financing long-term credit goods going into Russia.
During the first three months of this year Russia bought two and a quarter million pounds' worth of goods more from this country than she sold to us. Her purchases exceeded her imports in the first three months of this year by two and a quarter million pounds. Last year she had to make provision out of the credits that were raised by her imports, for an unfavourable trade balance during the first three months of this year, because of the lack of ordinary accommodation from the British banks. She had to use the credits that were raised in England to pay three and a quarter million pounds in Canada for purchases that were made there, and which fell due for payment during the early part of this year. That leaves, roughly, three and a quarter millions of the credit balance that existed. after deducting from last year's balance the adverse balance on the first three months of this year.
It is well-known that Russia has maintained a stable currency. She has a, balanced Budget. She pays for what she buys and does not buy any more than she can pay for. As a consequence, she has to maintain a reserve for her State bank very largely in American and British currency. Therefore, it is not true to say that these credits raised in this country
were available for the purchase of British goods. They were no more available than were the credits raised by Denmark or Czechoslovakia. What is happening? The foreign trade of Russia grows and expands. This country is doing a certain amount of that trade. We are doing a certain amount of it in my own constituency, and getting paid for it too. [Laughter.] It is all very well for those to laugh who know perfectly well that they will be all right to-morrow and the day after and the year after this year, and that whatever happens, their food, clothing, shelter and amenities of life will be safe; but it is another thing to the man who has lost the occupation in which he has been engaged all his life. I want the House to realise that in dealing with this matter there are men behind the problem who look at it from a different point of view from hon. Members opposite.
The growth and development of Russian foreign trade is going largely to our commercial competitors. Let me give a few facts. In 1924 Russia imported goods from the United States of America valued at 9½ million pounds. How was it that with a natural market in Great Britain, created by her imports, America was able to get that business? For a considerable proportion of that business she did frankly better than we did, and the orders went to her on economic grounds; but a considerable proportion of that 9½ milion pounds worth of trade went to America because of the better accommodation that the American banks gave to the Soviet Government. Take Italy. Italy has developed her trade in Russia. In July of this year a contract amounting to £3,000,000 for textiles, shoes and agricultural machinery was placed in Italy by the Soviet trade delegation. Hon. Members opposite will prefer that I should quote reliable authority upon this matter. Therefore I will quote the "Morning Post" for the 13th July last. The following came from their Rome correspondent:
Italian business men, backed by Government approval, are increasing their efforts to develop the Russian market. The most recent evidence of this is a contract just concluded, involving 300,000,000 Italian lire. This contract has been signed by the commercial representatives of the Soviet Government in Italy and a group of Italian banks and industrial companies operating under the name of 'Foreign Industrial Commercial Company.' The agreement
arranges for the immediate export to Russia from Italy of manufactured goods of the above-mentioned sum—an amount that is claimed to beat Italy's pre-War annual figure to Russia. In consequence of the activity of the Soviet business mission here, the Russian authorities have decided to open a branch office in Milan.
Take the development of the Russo-Polish trade. I could give facts to show that the facilities given in Poland for credit business with Russia are such that the trade between those two countries is increasing in lines of goods in which we formerly had a monopoly.
The Soviet Government are placing orders in this country to the value of £15,000,000, and in the schedule of orders there is a sum of over £5,000,000 for the purpose of machinery and 1¼ million pounds for agricultural machinery. I appeal to Members of the Government to realise that the policy of hate, hostility and ostracism between this country and Russia—and the fault is not all on one side—will drag us into conflict which will destroy our trade, and which is full of danger to the future, not only of this country, but of the British Commonwealth of Nations. If we isolate Russia, if we keep her out of the European comity of nations, we shall drive her towards the teeming millions of Asia. Unless this situation is handled with greater care, with a greater desire for a settlement and with more good will by the British Government, it will mean that two or three generations hence the people of this country may stand on the threshold of a new combination in which Russia will be linked up with Asia. I cannot believe that the interests of this country are being served by the attitudes that are being adopted by the Government, and I plead that they should take steps to clear up the outstanding questions between the two countries in order that this country and Russia may march together in the world as friends and not as enemies.

Mr. LOOKER: The hon. Member for the Brightside Division (Mr. Ponsonby), who opened this Debate, said that he could not understand what was the reason of the frigid indifference to the necessity of renewing our trade with Russia. He asked what was at the back of all this attitude. Referring to the anti-British propaganda on the part of Russia, he said that it had been grossly exaggerated. When he came to the question of anti-
British propaganda in China, he characterised it not only as disproved, but as farcical in the extreme. I hope to be able to suggest to him one or two considerations which may perhaps account for the indifference of the people of this country to an increase of our trade with Russia, and why they cannot share the views entertained by hon. Members opposite as to the farcical character of the propaganda in China.
I cannot help thinking that, instead of debating our relations with the Russian Government, it would have been better if we had put it the other way, and had discussed the relations of the Russian Government with us. To the ordinary man in the street the position is very confusing. On the one hand we have Mr. Krassin coming here with his pockets bulging with a credit for £15,000,000, which he is anxious to employ in relieving our commercial anxieties and in purchasing our machinery, always provided that he does not have to pay spot cash. On the other hand, we have Mr. Zinoviev, the head of the propagandist bureau in Russia, doing everything he can to create conditions all over the world, and particularly in this country, so that we shall not be able to sell any goods to anybody. All this is very puzzling to the ordinary man and to hon. Members on this side of the House. Which is the friend whose hands we are to clasp? Is it Short, the credit-monger, or is it Codlin, the propagandist? We should like to know exactly where we are in this matter. Which of these branches of activity represents the definite policy of the Soviet Government? If the hon. Member were to tell us that, it would enable us to make up our minds as to the right course we ought to pursue Is the Russian policy represented by a desire to trade with us as much as possible, or is it represented by a desire to create revolution, when no trade will be possible all over the world? Until we are satisfied about these matters we, at any rate, on this side of the House shall continue to believe that our interests will be better conserved by having nothing whatever to do with Russia.
I agree to some extent that the British nation is not the sole object of Russian propaganda. She tars us all with the same brush. She wants to dose us all alike with the same virulent poison. She does not care who gets most or who gets
it first. She is making a special attack on this country because Great Britain is the biggest game at which she can fly. She thinks—she may be right—that if she can bring down one of the kings of the forest that the lesser beasts are far more likely to fall. What is the reason for this? What was the position of Russia at the end of the War. She found herself an entirely isolated nation. No great Power would have anything to do with her. Instead of baking that part in the peace negotiations which her previous earlier participation would have entitled her to take she found herself an outcast.
She had to begin to find some way by which she could again step into what is called the comity of nations, and she, apparently, came to the conclusion that there were two methods by which she could do this. One was to make it so uncomfortable for every other Western nation that they would be obliged to pay attention to her, and the other was to reduce them all, if she could, to the same state of chaos which she herself enjoyed, and then nobody would have any advantage over the other. She set about doing this. She started in this country. She started in France, in Germany and in Italy. She went further afield and began operations in Mesopotamia and up to India. She established these propagandist bureaux in every quarter of the world from Great Britain and Europe to the Far East. She had not much success in the West, she found that the British people, the French, the Germans and Italians and all the others, were too intelligent or too stupid to be taken in by the glowing prospect which she held out would be attained by universal revolution. Everywhere she was a failure. Then came, two or three years ago, the Treaty or agreement which this country made with her, in return for which she undertook to cease anti-British propaganda in this country and throughout the British Dominions, and possibly beyond them as well, and she came to the conclusion that perhaps she would have to pay some lip service to that agreement, so she began to look round to see where she could better carry on her work elsewhere. She took a more intensive survey of the whole of the globe and particularly of the Far East, and she came to the conclusion that in the Far East there were conditions existing which offered a most fertile
field for her benevolent propaganda. The result was that she considerably strengthened her organisation already existing. She sent out from Moscow some of her biggest experts, and established a propagandist, or apparently as it is now called an agitatist bureau—

Mr. PONSONBY: May I ask the hon. Member to give us some proof or evidence of what he is saying?

Mr. LOOKER: The proof and evidence can be found by any person who chooses to make the necessary inquiries in the necessary places. She got extra emissaries from Moscow who she sent to the Far East. She started in Japan, Manchuria, and Korea, but met with little success there. She then devoted her attention to China in particular. She set up a Bolshevik school in Shanghai, which ultimately had to be closed by the municipal police. That is a matter which the right hon. Gentleman can easily verify. She even established a university in which her professors taught Chinese students these revolutionary principles by which she hopes to succeed. She spread her agents over the whole of China. She put her experts into every educational institution in China where she could plant them, and in China she found conditions very favourable. She exploited the anti-foreign sentiment which has always existed in China, and which, I think, will, to a large extent, always exist. What she said and is saying to-day in China to the Chinese is, "Why do you any longer suffer this foreign domination? Why allow these unequal treaties to continue? Why allow these foreigners to live undisturbed in special concessions, instead of being subject to the laws of China? Why allow your sovereignty to be infringed?" There they find a very fertile breeding-ground for discontent among a great many of the Chinese.
In addition, in the state of chaos which exists there at present she has found in the rivalries of the various War Lords another fruitful ground for her enterprise. Expert officers, arms, money, propaganda —she has supplied them all. She is behind the various War Lords whose rivalries are now creating such trouble in China to-day. Her policy was this, that if she could stop foreign trade of all descriptions in the Far East it would have such a reflex effect in this country that
it would at once create here the very conditions which she hoped originally to create, but which she failed to create, and she planned a plan of campaign which, having started in the remoter parts of China and Japan, would spread from there to the East Indies and India and thence—

Mr. JOHNSTON: Do we understand the hon. Member to say that all the arms that have been sold to War Lords in China during the past few years have been supplied by Russia? Is it not the case that Italy, Belgium and Britain have been supplying arms?

Mr. LOOKER: I did not say that at all. I know that it is quite possible that many nations have supplied arms, but what I do say is that Russia did supply arms, and I say that one in particular of these war lords owes a great deal of his arms, his training, his men and his resources to Russian help. I am aware that this is a, general statement, but it is an incontrovertible fact. Everybody who has been in China or comes from China or knows anything about China knows it to be a fact. You will see it repeated constantly in the Press of all descriptions, and it is too much to ask the British public to believe that there is no foundation for these statements. Then there are the students who come back to China after having been trained in foreign universities, and have found in the conditions in their own country at present no scope for the education which they have gained, with the result that they were, so to speak, kicking their heels about in idleness, and they have no vent for their intellectual activities or their experience or their training. Among them, again, there is found a fertile field for discontent. The result is that, during the last five years in China, you have seen increasing agitation of all descriptions, industrial and otherwise. Russia's hand can be traced in all these matters. In the recent troubles which took place in China, Russians were there. They were seen there, and the letters which we get from China tell us that they were there, with the students encouraging them, inspiring intimidation, and fomenting strikes and disturbances.
You have only to walk about in Shanghai and other cities in China to
see these Russians permeating the whole place, side by side with every revolutionary or disturbing element, which exists there, and so far as South China is concerned Russia managed two years ago entirely to win over Sun Yat Sen, and her advisers have been giving him the necessary support. She supplied the necessary officers and she established in Canton a Chinese central corps, officered by Red Russian officers, with Chinese soldiers who were taught the first principles of military warfare and the first principle of revolutionary arms, and they exist to-day in numbers. Canton is honeycombed with them. When that demonstration took place in Canton the other day—the demonstration which led to the foreign concession being fired upon —a procession was marching along one side of the creek, not as wide as this House, which separates the native city from the concession, and there were the Russian officers marching with the students, marshalling and directing and encouraging them. That is a well-known fact, and I make a present of it to the hon. Member for Brightside (Mr. Ponsonby), as one authority at least for the facts which I have mentioned. What are the conditions resulting? British trade is paralysed, our shipping is entirely laid up, and our export trade is at a stand-still. In fact it is the one success which Russia has achieved by her propaganda.
The Chinese are a very shrewd nation. When it suits them they have no objection to taking advantage of these Russian activities. When it no longer suits them, they will drop the Russians and say, "Thank you very much; we have no longer any use for your services." But we shall soon feel in this country, if we are not feeling it now, the reaction of this effect Russia has created in China. We shall soon find in those industries which are engaged, or have been engaged for many years, in exporting goods from this country to the Far East, increased unemployment and increased lack of business, which we may attribute almost entirely, if not quite, to the activities of our Russian friends in the Far East. Yet, if we are to believe hon. Members opposite, our salvation in this country, from the commercial point of view, is to enter into greater trading relations with the very country which is trying to create
these conditions throughout the world. It seems to me a very extraordinary suggestion. One hon. Gentleman said it was a question of confidence. I quite agree with him. But I think I am right in saying that it will be some time before the people of this country have any confidence, either that any amount of trade can be done with Russia under any conditions, or that it is wise to trade with a country which in another sphere of her activities is endeavouring to create such conditions that there cannot possibly be any trade at all.

The UNDER-SECRETARY of STATE for FOREIGN AFFAIRS (Mr. Ronald McNeill): ; Two very important subjects have been opened in this Debate, and in the very short time that I can encroach on the House, I can hope to deal with them only in a very fragmentary way, because I know that there are other subjects to come on later. I would like to say at the outset that I share entirely the regret of my hon. Friend the Member for Brightside (Mr. Ponsonby), who opened this Debate, that my right hon. Friend the Foreign Secretary was unable to be here this afternoon. I am sure the House will realise that my right hon. Friend's engagements are exceedingly onerous, and that, as he has to go to Geneva in a few weeks' time, it is almost a mockery to talk of anything in the nature of a holiday for him. In these circumstances, I am sure that the House will excuse his absence, which no one regrets more than I do.
I must say that when my hon. Friend gave me notice, that he was, on this last day of the Session, going to bring before the House the question of our relations with Russia, I did, at least mentally, pay him the compliment of showing extraordinary persistence. In fact I cannot help thinking that my hon. Friend is suffering from what psycho - analysts would probably call the "Soviet Complex." To his persistence he certainly has added assurance, because he actually opened his speech by a reference to the Treaty which he said was turned down by the present Government—a Treaty with which he was so much concerned last year. I do not know whether he thought that there would not be in the House, many Members who were present on that memorable last day of the Session last year. To-day must be almost the anni-
versary of it. Any who were here will remember the merciless exposure which was made of my hon. Friend upon that occasion, and the comment.
A few days before, the world had been informed that the long-drawn-out negotiations between the Government of which my hon. Friend was a member and the Soviet Delegation had come to nothing. That was announced: no agreement had been reached. Then there were runnings to and fro, secret meetings held, left wing opposed to right wing; and on the very last day of the Session the Vote Office was entirely innocent of any document on the subject. There was no possibility of getting a copy of the Treaty which we were told had just been signed, but the hon. Member for Brightside came into the House and explained how all the typewriters of the Foreign Office had been kept going all night, and at last the document was handed round to us as the great Treaty which had been concluded with Soviet Russia. Now my hon. Friend asks us why the present Government turned down the Treaty. I can answer that question very shortly. It was turned down by the present Government because the present Government have an overwhelming mandate from the country to do so. It was that comical transaction in which my hon. Friend was so conspicuous, which more than anything else led to the Labour Government's downfall at the Election of last year.
My hon. Friend, as a sort of key-note to his speech, has laid down the proposition to-day that trade relations depend upon political relations. I do not believe for one moment that in any large and general sense that is true. It was completely refuted very shortly after he sat down by an hon. Friend behind him, the Member for Lincoln (Mr. Taylor). The hon. Member for Lincoln, dealing with another point and not seeing its bearing on this particular matter, informed the House that a large body of Russian trade which we ought to be enjoying is going to the United States. The United States is the one great country that has refused to have any political relations whatever with Soviet Russia. It has refused to recognise Russia either de jure or de facto, and when proposals have from time to time been made for a change of policy in the United States, they have been contemptuously rejected. We could not
possibly have a better proof that, as far as trade relations are concerned, political relations are not so important as has been suggested.
I have listened to the speeches that have been made from the opposite side of the House complaining of our relations, and explaining, or trying to explain apparently, that much better trade might be done between the two countries if the present Government would alter our relations with the Soviet Government. The hon. Member for Brightside has not told us what he thinks we ought to do. Nor has any speaker told us what we ought to do in order to bring about trade between the two countries. I do not entirely agree with some of my hon. Friends who have implied that it is a matter of comparatively little importance whether we do trade with Russia or not. That is not at all the attitude of His Majesty's Government. We realise that it is of immense importance that we should do trade with Russia. We are anxious to do trade with Russia, but I deny that it is owing to any attitude on the part of His Majesty's Government that we are not doing as much trade with Russia as we might be doing. The real obstacle to larger trade with Russia is not any attitude of the present or any other Government. The real obstacle is, first of all, the monopoly which the Russian Government hold in carrying on foreign trade and the extremely complicated and restrictive machinery which they have put up for carrying on that monopoly. That is, I believe, one of the main obstacles, and another is the Russian Government's want of credit.
The hon. Member for Lincoln declared that the Soviet Government had not defaulted on any engagement of theirs. In a sense that is true. I do not know that the individuals, that small oligarchy who now control the Government of Russia, have personally defaulted. I could not put my finger on any transaction to which they personally have put their signatures, and in which there has been default, but that is not sufficient for the Government of a great country. The Government of a country have not only to implement the engagements which they as individuals sign, but they are under an obligation as regards undertakings given on behalf of the country which they represent, and the present Government of Russia are
conspicuously defaulters—I should say the greatest defaulters modem history knows —in repudiating obligations entered into on behalf of their country. So long as that attitude is maintained I think it extremely unlikely that any commercial nation will consent to do very much trade with them. As the hon. Member for Lincoln quite truly pointed out, confidence is the key to trade of this sort. But where is the confidence to come from? Confidence does not spring from any relations between one Government and another. Political confidence may do so, but the confidence which is required in the City of London depends upon a course of business, an attitude towards business and a way of doing business with which Cabinets have really little or nothing to do. The hon. Member for Brightside complained of the attitude of the Government towards Russia, and in explaining exactly wherein that attitude consisted, he told us four reasons which he thought lay at the back of it. I do not think any of those four reasons are governing factors in the matter at all, though, of course, I think it quite true that, so long as the hostility all over the world towards this country—the existence of which the Russian Government can hardly deny—continues, it makes it extremely difficult, first, to have any really cordial relations between the two Governments, and, secondly, to have any increasing trade relations.
I do not want to exaggerate the question of propaganda. My hon. Friend asked for positive proof and says we never give positive proof that propaganda goes on at all. Why should we? I do not think any proof could be so positive that it would convince my hon. Friend. I think his mind is closed to proof, but in any case, why should we give it to him? I really do not want to convince my hon. Friend. All that the Government are concerned with is the justification of their own action. We know perfectly well, though we may not be able to convince my hon. Friend, that propaganda goes on in a great many different parts of the world. We know at the present moment that Russian intrigue is creating great difficulties and making much mischief in China, but, at the same time, I do not want to exaggerate its importance. I do not believe for one moment that the Russian propaganda in the long run will
succeed in doing any very material damage to the British Empire. I know they think they are doing a great deal of harm. They are doing their worst, or their best, to injure us so far as they can, and that is not a very friendly attitude. I do not think we are in the least afraid of them. I do not think they will succeed in doing us any very vital injury, but when my hon. Friend says that what is wanted is a friendly relationship between the two countries, you cannot leave these facts out of account, and I think his remonstrances would be much better addressed to Moscow than to His Majesty's Government. I would like to ask my hon. Friend and those who agree with him this plain question when they talk about the absence of certainty and demand proof with regard to propaganda. Does he honestly believe that the present régime in Russia is actuated by friendly motives towards this country? I do not believe for one moment he could answer that question in the affirmative.

Mr. PONSONBY: I could not answer it in the affirmative as far as His Majesty's present Government are concerned, but with the late Government they were friendly.

Mr. McNEILL: I do not deny that it might be possible to buy a more friendly attitude. My hon. Friend in that Treaty which was laughed out of court in the House last year, and still more laughed out of court in the country a short time afterwards, was proposing to give a large loan to the Russian Government.

Mr. PONSONBY: No.

Mr. JOHNSTON: A guarantee.

Mr. McNEILL: Well, a credit which comes to the same thing. We had great discussion as to what the amount of the credit was to be I see that in a recent publication M. Rakowsky names £90,000,000 as a suitable sum to put Russia on its feet. But, after all, behind all these particular ebullitions there is some thing more. I suppose the present Russian régime would acknowledge Lenin as its leader. Not very long before his death he said:
The Soviet Republic and capitalist States cannot exist together, and in the long run one of the two will destroy the other.
If that doctrine be, as I suppose it is, accepted and held by his followers and disciples, we have a very fair warning at all events of their aim and object. It appears to me to be idle at this time of day to come to this House and pretend, because we do not produce proof convincing to my hon. Friend of every item of propaganda which comes to our knowledge, that the relations between this capitalist country and the Soviet Republic are to be governed by the same friendly attitude which they were able to extend to my hon. Friend.
5.0 P.M.
Before I pass from that subject, let me call attention to a much more recent statement by a prominent statesman, whom I think hon. Members opposite will respect. In the Belgian Chamber, only a week or two ago, a speech was made by M. Vandervelde, who my hon. Friends behind me, without being so familiar with his name as the hon. Members opposite, will know is, of course, not merely the leader of the Socialists in Belgium, but is recognised as one of the leaders of international Socialism. But he is now a Minister of the Crown in Belgium, and, therefore, finds himself in a very responsible position. He was being pressed in the Belgian Chamber the other day, just as I am being pressed to-day, with regard to relations with Russia. He was called upon to give recognition—they have not yet done so—to the Soviet Government, and M. Vandervelde, in reply, said that no doubt recognition would have to come, but, he said:
Such recognition can only take place as the result of an economic agreement, and subject to two conditions: Firstly, the recognition by the Soviet Government of the Republics recognised by us, such as Georgia, which are subjected to oppression by them; and secondly, a satisfactory arrangement safeguarding our interests in Russia. It will be necessary for our nationals to obtain substantial and satisfactory compensation. Till this has taken place, the recognition of the Soviet Government would be but an empty gesture. The example of the countries that have taken this course does not encourage us to imitate them.
That is the opinion of a very distinguished Socialist statesman at the present moment in Belgium, and I think, myself, that it expresses a very sensible view. But before I pass from the subject, I do not want it to be understood that we underrate the importance of trade with Russia.
We are anxious to promote it in every way that we can. I also want to repudiate entirely the idea that there is any active unfriendliness on the part of His Majesty's Government towards Russia. If there be any unfriendliness, it is entirely upon the other side. If the Soviet Government choose to approach us in a perfectly friendly spirit and make proposals, either for the resumption of larger trade or for the promotion of larger trade, any proposals which they make in that way will receive very careful and quite sympathetic consideration. But, as far as we are concerned, after what has passed, and with our knowledge of the policy and methods of the Soviet Government, we think it would be merely waste of time and inviting a rebuff for us to approach them, and we do not intend to do so.
I must pass from that to the other subject which my hon. Friend introduced, the subject of China—a very important one—and I hope he will not mind me saying that on this subject I am bound to be rather cautious in what I say. I am bound to be more cautious than if I had the whole responsibility myself. If my right hon. Friend the Foreign Secretary were here, he possibly might be more explicit and give more information, but my hon. Friend began this part of his subject by saying that the Government were showing supine inertia. I wonder what is the justification for that. How does he say that the Government has been showing supine inertia? He did not develop that. All that I can assure him is that, as far as I am able to judge, there is not the slightest foundation for that charge. At all events, I think His Majesty's Government have been very active, from the very first moment that these troubles developed, to try to bring about, first of all, a wise settlement of the existing troubles, and to go behind them and to devise, encourage and initiate, as far as they could, a wise policy dealing with the whole subject of our relations with China and the internal condition of that country.
I cannot say very much about the actual incidents at Shanghai. My hon. Friend says that the Shanghai papers are now being received in this country, and he
asked me whether the accounts which they contain are trustworthy. Well, I am not able to answer that question. I have not myself seen the papers to which he refers, and as we shall have, I hope, in a very short time, information which we believe will be quite trustworthy—at any rate, it will be official information—I do not know that any good purpose would be served by our acting upon, or assuming either the trustworthiness or otherwise of mere Press accounts which may be reaching London at the present time.

Mr. PONSONBY: I quite understand that it is not possible to say whether or not the whole of the Press accounts are trustworthy, but I think it is important that this House should know whether the three Resolutions which are supposed to have been passed by the Diplomatic Commission are accurately represented.

Mr. McNEILL: As I say, I have not myself seen these newspapers, but I will tell my hon. Friend and the House very gladly what I think is the true position with regard to those recommendations.

Major CRAWFURD: Is the right hon. Gentleman referring at the moment to the inquiry that is going to be set up in regard to Shanghai?

Mr. McNEILL: No. I am referring to another matter, which was introduced by my hon. Friend the Member for Bright-side. When these disturbances took place at Shanghai, the Diplomatic Body sent down from Pekin a Commission, representing them, of some junior members of the Embassies and Legations there, to make an investigation on the spot. It is one of the examples, I think, of the unfortunate effects produced sometimes in these international matters when documents or information are prematurely published. I know that my hon. Friend is a very great devotee of open diplomacy, and does not like any secrecy, but sometimes the divulging of information or reports prematurely gives a very wrong impression and very often creates difficulties. I think that is rather the case in this instance, because that examination or investigation by representatives of the Diplomatic Body in Pekin was only intended to be preliminary. I will not contest that the recommendations that have appeared in the Press are probably correct, but I do not
think much turns upon them, because all that will be merged in the much more important, much more searching, and much more authoritative examination of the whole of the circumstances to be conducted by a judicial body to be set up by the Powers, which will consist, no doubt, of very highly qualified judges, and which will have much more power than this rapidly improvised deputation from Pekin in taking all the evidence available and arriving at a perfectly impartial judgment upon the event.
It is towards the setting up of that tribunal that His Majesty's Government have been, above all things, exerting themselves, I may say, from the very first. Hon. Members may say that a long time has elapsed since those events, and that is quite true, but let hon. Members imagine—they have probably all had experience of it—a committee consisting of a number of members trying to draft a document. Even if there are no differences of opinion, everybody knows how difficult it is for a large number of members to draft any document which is satisfactory to everybody, with everybody round the table suggesting an amendment here or an amendment there. That is exactly what took place between a number of different Powers, with the additional difficulty that, instead of doing it across the table in conversation, it had to be done by telegraph between the representatives of those Powers in all the capitals of the world. What happens is that one Power will suggest an amendment. That may be accepted, perhaps, by ourselves. Then it has to be accepted by everybody else, and while that is being done, somebody else suggests an amendment. The consequence is, that in a matter of this importance, where unity is, above all things, necessary, it is a very difficult thing, except at the expenditure of a very considerable amount of time, to get complete agreement upon a draft, either of a Note to the Chinese Government, or terms of reference, or anything of that sort, and it is that difficulty, more than anything else, which has caused so much time to elapse in the setting up of this tribunal.

Major CRAWFURD: Could the right hon. Gentleman give us any idea at all as to when this inquiry will begin?

Mr. McNEILL: I hope now that all the delay is in the past. We have now-got the agreement of all the principle Powers concerned. I am not quite certain whether there are any points still outstanding with one or two other countries which are entitled to be consulted, but I have every reason to believe now that all the preliminary work has taken place, and that this tribunal will be set up in the very near future. With regard to the larger question of China, to which my hon. Friend referred, first of all he said that the position of affairs was not due to Bolshevist propaganda. I quite agree with him. It is not due to Bolshevist propaganda, or to any single cause, but, notwithstanding that it is not due to Bolshevist propaganda, I do think Bolshevist propaganda has been fishing in troubled waters. I think it has been exasperating tempers. I think it has been making more mischief where there was mischief to begin with, and I have very little doubt my hon. and gallant Friend the Member for Wycombe (Sir A. Knox) was quite right in saying it was very largely due to Bolshevist propaganda that the anti-foreign movement has, for some time past, largely concentrated its animosity upon ourselves rather than upon other nations. I cannot otherwise account for the fact that we should be singled out by Chinese opinion for hostility, when, in point of fact, all the presumption would be that we should escape the lightest, because I do not think anyone who knows the history of our relations with China, and the history of other countries' relations with China, although we may all have been sinners in the past, can deny that we have certainly for a long time past shown ourselves to be the best friends China has among the foreign nations, although I do not want to go into that in any controversial spirit.
What I do want to say is this. Chinese interests and British interests there are identical. There cannot be any doubt about that. What is the chief interest of China? It is, first of all, internal peace, stability, settled Government and prosperity. Is not that necessarily and obviously the interests of this country, too? We are a great trading nation, and trade can only flourish in an atmosphere of peace, stability and confidence. Therefore, it is obviously our interest also that
China should enjoy those blessings, and if we are to be prosperous in China, China herself must be prosperous, and, unless she is, we cannot be. The British interests, of course, as everybody knows, are gigantic. In these days of our depressed trade and unemployment, what could not China do for us, if she were peaceful and prosperous, in offering an open market to us in the way of employment and trade? Lancashire could be made booming to-morrow by China alone.
Consequently, as I say, our interest is to promote peace, prosperity, stability and confidence throughout China. It is not an easy thing to do. On the one hand, we find that there is no real central government. My hon. Friend asked me not to fall back upon that plea. I do not. It does not exonerate us from making an effort, and from doing everything we possibly can, both to help us and China, but we must recognise it is an obstacle in our path that there is no central government. But we are very hopeful of what may result both to China and ourselves from the coming conference on tariff revision and on extra-territoriality. As the House knows, those are matters which have not sprung up since the troubles in China, since the anti-foreign movement has become very insistent. The good will displayed by foreign nations to China antedated all those symptoms. In fact, in 1922, as a result of the good will created by all being on the same side in the late War, we showed we were anxious to anticipate those demands, that we were anxious to promote the aspirations of China which we recognised as reasonable, and to do all that we could to help her along the new path she had chosen. That was all embodied in the Treaty at Washington. It was not the fault of this country that delay occurred. It was laid down in Washington that the Conference was to be held three months after ratification of that Treaty. We ratified immediately, and, therefore, of all nations, we may claim we were the most prominent to show our wish to help. Other nations delayed, and the ratifications have only just now taken place. Consequently, the Conference cannot be held immediately, but it will be held very shortly, and I may say that I do not think, in spite of all the difficulties that there are in China, which I cannot enumerate at greater length, but
which were dealt with by my right hon. Friend on the 18th June—in spite of much discouragement, I do not think we ought to be pessimistic with regard to the future of China, and what we can do.
For the moment, of course, we have one paramount duty. Recognising the magnitude of the British interests in China, and the danger which the movement there has caused to life and property, the first and paramount duty is to protect the lives of our nationals, and the property upon which British interests depend. That is, of course, a duty which we cannot shirk, and no Government could shirk, but, looking beyond that, we hope the coming Conference will improve the whole of the foreign relations with China, and especially with ourselves. I do not believe that the present concentration of animosity against ourselves can persist. I believe the judicial inquiry at Shanghai will do much to restore sanity. I believe it will do much to bring out the truth. If, under the judgment it delivers, any obligations are thrown upon His Majesty's Government, they will be certainly taken up. We shall not shrink from any admission of fault, if there be any fault in any of our nationals, and we shall do whatever the judgment may lay down to make good any claim that may be preferred and made good against us.
What is more important is that we should lose no opportunity to help the Chinese to help themselves. The Government have scrupulously abstained from interfering in the internal government of China, and that is not an easy course to pursue. There is practically no settled Government. There are provincial Governments, governing vast territories, probably, in most cases under military rule, and technically—in some cases at least—rebels against the central Government, but yet exercising an authority which cannot be ignored. In these circumstances, it is not very easy, while abstaining from internal interference, to do much to help. We intend, however, to do all we can. It is with that aim that we shall enter the forthcoming conference, and in the good hope that it will lead to results which may be of very great and far-reaching importance, and of permanent benefit, not only to the Chinese, but to ourselves.

Orders of the Day — CIVIL SERVANTS (WAR SERVICE).

Mr. AMMON: I am afraid that the question I have to ask the House to consider is comparatively small considering the wide-reaching subject that we have just been discussing. The point is a simple and a short one, but it is one concerning at least 20,000 civil servants who were formerly either soldiers or sailors with His Majesty's Forces. The Short point is, to ask that the terms of service in the armed forces when these men subsequently enter into the Civil Service shall be allowed to count towards their pension. There are two sets of ex-service men in the Civil Service to-day, those who are known to be the ordinary professional soldier and sailor and the temporary Service man who served during the last War.
The point I am mainly concerned about is for those, who having completed their full length of service with the Colours, and then passed a Civil Service examination, or complied with certain regulations, have entered into the Civil Service. The point can best be gathered if I put it this way: Of two friends, say, A and B, both of 19, the one enters the Army while the other becomes a postman At the end of eight years the one who entered the Army as a volunteer has finished his military service. He then enters the postal service and, like his friend, becomes a postman. At the end of their careers, at 60 years of Age, when they become pensionable, the one who has been all the time with the Post Office receives forty-sixtieths of his pay by way of pension, and the other receives only thirty-two sixtieths, that portion of the time that he served with the Colours being entirely ignored. It seems only fair that if these men have given a continuous service to the Crown that they should be entitled to count it towards their pension.
In this connection I am not asking something which is not already admitted fairly widely in the public service. Civil servants who joined up during the last War were allowed to count the period of time which they served with the forces, either ashore or afloat, towards their pension as though there had been no break. Police constables who joined up are allowed to count the three years' police service for four years' Civil Service as though there had been no break. Similarly, telegraph messengers who joined up and received their appointment
as postmen during the War are allowed to count the whole of that service towards their pension.
The point I am now submitting was confirmed by a Committee appointed under the chairmanship of Colonel Sir Edward Ward in 1906. It is worthy of note that on that committee were such distinguished soldiers as the late Lord Cheylesmore, and eminent business men like Sir George Livesey, the chairman of the South Metropolitan Gas Company, and, what is more significant from some points of view, the head of the recruiting staff of the British Army. They signed and brought in a unanimous report supporting the point of view that I am now putting to the effect that it was only fair that this term of service should be allowed. I do not want to labour this point, but I can give chapter and verse and quotations from authorities, of which I have copies here, who have accepted this principle and applied it. The point is a short and simple one. It has been accepted by a committee appointed by a former Government, as I have stated. In some parts of the public service even directly under the Government the principle is admitted. It concerns only 20,000 people, or whatever number there may he at any time, of professional soldiers or sailors, and has no regard to those who serve at any exceptional time, for whom special arrangements are made. This has been the subject of agitation for possibly 20 years past.

Mr. GUINNESS: Thirty years.

Mr. AMMON: The Financial Secretary corrects me, and says it is 30 years. I trust it will now be settled, and settled, I hope, by the acceptance by the Treasury that they are prepared to meet these men, and put them on an equal footing with those who started in other branches of the Service.

Mr. W. BAKER: I desire to associate myself with the appeal that has been made by my hon. Friend. The figure of 20,000 which he gave was not quite accurate. It was prior to 1914, but not since that date. The number at the moment is probably now in the neighbourhood of 35,000. As my hon. Friend said, the simple claim is that continuous service under the Crown should count for pension. Whether that service is given to
the Army, the Navy, or the Civil Service, it is service given really under one head and should be treated as a whole. I have heard very many discussions on this subject. I have been associated with many representations regarding it, but I would respectfully submit that the claim has never been fairly disposed of by argument. The ground on which this claim has been rejected is that the Government of the day have never found themselves in a position to meet the financial obligations of it. The question, as my hon. Friend has pointed out, was considered in 1906 by a committee under the chairmanship of Sir Edward Ward. After that War Office Committee had carefully investigated the whole subject they reported in favour of the men. I would like to read a short extract from that report which will make my point clear. The Ward Committee said:
Such an arrangement as this is, in our opinion, inequitable, and rests upon a purely arbitrary basis for army and navy service, with their attendant risks, should surely be regarded as at least equivalent in its pension-bearing value to civil service, and the existence of a rule which declines to recognise the former as such is, not unnaturally, viewed by those concerned as unjust. An amalgamation of civil and naval service for civil superannuation is admitted in the case of certain shipwright boys who engage to serve for 12 years from the age of 18 in the Fleet, and are then transferred to the civil establishment in His Majesty's dockyards, being held liable for sea service in emergency up to the age of 50, and for this purpose only in the Royal Fleet Reserve. Sea time is allowed in all such cases to reckon for civil superannuation. Similar provision has been made with regard to dockyard riggers and seamen in yard craft by Order in Council of 16th April, 1861; and the civil servant who joins the police carries with him his civil service towards pension under the Police Act, 1890.
I could quote further paragraphs from that Report in support of my contention, but I think that will be held to be sufficient for the purpose.
Not only has this claim been considered by many Governments and reported on by the Ward Committee, but the Army Committee of the House of Commons has, on a number of occasions, had this matter before it. When the hon. and gallant Member for Abingdon (Major Glyn) was secretary to the Army Committee in the Parliament before last, he and his Committee carefully considered this case, and made representations to the Treasury on
behalf of the men. For the reason I gave before, that is, the ground of cost, the Government of that time were unable to make any concession. It may be as well to remind the House that, owing to the practice whereby a large proportion of the vacancies for postmen are reserved for ex-soldiers, 70 per cent. of the men affected by this claim are employed in the more poorly-paid positions in that Department. As my hon. Friend pointed out, the result is that when these men reach the point at which they have to be superannuated they find themselves in receipt of a pension which is insufficient to provide them with a reasonable standard of life in their old age, and their sense of grievance is aggravated by the fact that men with no longer service under the State are receiving considerably more in the way of superannuation.
I will conclude by reminding the right hon. Gentleman who is to reply that there are a large number of superannuation anomalies in the Government service. As we found during the last Parliament, and as we have found during the present Session, a tremendous amount of dissatisfaction exists with regard to these conditions, and I would earnestly appeal to the Government to consider whether it is not possible to appoint a comprehensive Inquiry to examine into the whole of these anomalies, in the hope that we may once and for all be able to lay down a standard which shall be acceptable to the persons who for so many years have suffered under what they regard as a real grievance. It may be that the Government may not be able to make a financial concession of the magnitude for which the men are asking, but I believe a settlement of these outstanding questions is possible, and I sincerely hope something on those lines may be done.

The SECRETARY of STATE for the HOME DEPARTMENT (Sir William Joynson-Hicks): May I say a word to the House on a different subject? The House may like to know—and there are no other means of bringing it before them—that I have received the Sheppard Inquiry Report from my right hon. and learned Friend the Member for Cambridge University (Mr. Rawlinson). I have not read it yet, I have only just received it, and it is impossible for me to lay it as a Parliamentary Paper before the House
rises. If the House will forgive the irregularity, I propose to publish it in the Press as early next week as possible, so that Members of the House may get the fullest information. Strictly speaking, of course, I ought to lay it as a Parliamentary Paper, as directed by the House, but I am sure Members would prefer that I should not wait until next November, as the House and the public will want to know what the Report contains. Therefore, with the assent of the House, which I am sure will be granted, I propose to publish it as early as possible next week, and then it will be laid later.

Mr. BUCHANAN: Seeing that this raises a far-reaching question and one in which wide interest is being shown, will the Home Secretary or the Government consider giving us time when we reassemble to discuss the Report and any recommendations that the Home Secretary makes?

Sir W. JOYNSON-HICKS: As the hon. Gentleman knows, that matter is one for the Prime Minister. All I can say is— and I repeat that I have not yet read the Report—that I do not think it right to leave it over till November. It may be that I shall take some action upon it when I have read it, and in that case, of course, my action could undoubtedly be challenged in November.

Mr. GUINNESS: I think it will probably be convenient if I deal at once with the proposal brought forward by the hon. Member for North Camberwell (Mr. Ammon) that military service should be reckoned towards civil pension. As he told the House, this is a very old question, and it is not merely a question of administration. The Superannuation Acts definitely forbid the aggregation of military or naval service with civil service for pensions, therefore it is not a matter which could possibly be dealt with without further legislation. But if the House will examine the matter a little more closely, and not leave it where it was left by the very attractive case put forward by hon. Members, they will see that we should be landed in endless difficulty and a great deal of injustice if we were to accept this principle. Normally speaking, the soldier's engagement is not pensionable, nor is the sailor's, they have to re-engage to qualify for a pension, and just because
the original engagement is not pensionable, it carries gratuities of varying figures, which are largely in place of any pension rights. Men who re-engage get their pension at the end of 21 years in the Army, and, I think, 22 years in the Navy, and if they go into the Civil Service they can draw their pensions from the fighting Services side by side with the pay they draw from the Civil Service. If we are going to make military service count for civil pension we shall have to take away the right which these pensioners now have of drawing their pension for their re-engaged service when they go into civil service.
The hon. Member for North Camber-well mentioned the case of the police, but in such a case a man in the Civil Service carries his pension with him and the distinction is easy to justify. The soldier or the sailor is not quite in the same position, and the policeman is entitled to look forward to a pension on his original contract. If he goes into the Civil Service his pension is not borne by the Civil Service Vote, but the local authority under which he serves makes the payment to the Civil Vote and Appropriation-in-Aid for the commuted pension which has been transferred. The proposal of the hon. Member would mean that he would pick out a favoured few of the fighting Services and give them a pension which would not extend to their less fortunate neighbours, and that would be an impossible position to maintain. You could not link up such cases with the man who went into the Civil Service and afterwards into the fighting Services, because it would have to extend to everyone who served even on a short engagement. On the other hand you could not limit it to the professional soldier.
The hon. Member for North Camberwell referred to the recommendations of the Ward Committee, which reported in 1906. That was a War Office Committee inquiry into quite a different subject. They inquired into the civil employment of soldiers and sailors after they left the Service, and the present question does not seem to have been in the terms of reference. They never heard any evidence on the subject before making their Report. The hon. Member also mentioned the treatment of the civil servant who joined the forces during the War. I do not think that is
really a true comparison, because the position in that case was simply that those civil servants who were transferred during the emergency period had their posts kept open and were given the balance as civil pay where it exceeded their military pay, so that they should not be penalised in the matter. Thus they were protected against unfair discrimination during the period of their service as they were all the time during their civil service, and they were also protected in their pension rights during their period of civil service.
The hon. Member for East Bristol (Mr. W. J. Baker) mentioned a case which was dealt with in the Ward Report of the shipwrights class who had served afloat and were transferred to civil employment in the dockyards and drew pensions as for continuous service. Those classes are all paid for by the Department in which they took their original service, and they get those pensions under a special Naval Act which entirely distinguishes their case from that of the civil servant. The overwhelming reason against opening this matter now is the question of expense. Civil Service pensions cost about £4,500,000 a. year and the Fighting Services pensions nearly £14,000,000 a year. At a time when national economy is so essential we could not really undertake to extend conditions which were not meditated in the original contract to the particular favoured section of the Fighting Services.

Orders of the Day — NAVAL OFFICERS (MARRIAGE ALLOWANCE).

Major HORE-BELISHA: I do not intend to follow the right hon. Gentleman into the subject with which he has just dealt except to say that I think it would be a very wise thing to accept as a principle that the State should employ its servants in any branch of the Civil or Military Services accordingly as they may be suitable, and the State should allow them to carry their pension rights with them. That would he useful in the case of naval men who, after obtaining their pensions, go into the dockyards, and if they were allowed to count the time of the dockyard service as an extra pension, it would be a concession which could be justified. I merely rose to call atten-
tion to the question of the marriage allowance to naval officers. This question has been brought up regularly week by week in this House for a very considerable period. I have been a member of this House for nearly two years, and I do not think a single week has passed without my raising this question, and almost continuously I have been told that the matter is under consideration. It was under consideration by the last Government, and it was under consideration by the preceding Government.
In the last Government on one of the Supply days, this subject was chosen by the party now in power for the specific purpose of calling attention to this question. Therefore, it is not a party question. They expressed at that time strong views about the time consumed in the consideration of this question, and I am sure that they have received the result of their efforts with great disappointment. Nobody can say that there has not been full and adequate time given to this question not only by this Government but by previous Governments. The last Government appointed a Committee which as I understand reported unfavourably as to the granting of these marriage allowances to the only Service in which they do not apply. The Report of that Committee was presented not to the last Government but to the present Government. It was considered and the result of the consideration was that the House of Commons was asked to vote a sum of £350,000 for the purpose of giving these allowances to naval officers.
There are in this House, as there are outside, a considerable number of persons who scan the Navy Estimates with a very critical eye with the object of eliminating any possible item from those Estimates, and it is significant that no single Member of this House, however much he might disapprove of money being spent on the fighting Services, raised any objection to this Vote of £350,000 which the Government sought in order to meet these allowances. There was no Party considerations involved in the matter at all. The House of Commons, utilising its historical functions, granted the Supply, and the taxpayers, accordingly, were taxed for the purpose of providing this money which had been allotted to a specific purpose.
All Members who were interested in this matter on all sides of the House imagined that it had been disposed of once and for all; that it had emerged from its long period of consideration into the region of decision. There was a period of delay. No scales were announced, and we were beginning to wonder what had happened. We asked whether the Government were proposing to grant these allowances, and the answer, to our amazement, was that the matter was under consideration. That answer had been given previously in the granting of the Estimates, and those who have any knowledge of public finance know that no item appears in the Estimates which has not been subjected to very careful scrutiny in the Department, which has not been corrected and examined and sifted by the Treasury; and it is, therefore, to be supposed that not only the Admiralty but the Treasury also, with a knowledge of all the facts and figures, had definitely and specifically approved of these allowances being granted. And the House of Commons endorsed the decision, it thought that the decision of the Admiralty was a just and meritorious one.
I hope I shall have the attention of the right hon. Gentleman on this point, because there are a great many people awaiting his announcement with great interest. I say that the Treasury must have examined and approved of these Estimates before they were presented to Parliament. Therefore, the period of consideration to all intents and purposes had been completed. The House of Commons had approved of the Treasury decision, and of the Admiralty's decision, but no allowances were forthcoming. We were told, to our amazement, that the matter was under consideration. We had been told that over a period of months. Gradually, the answer changed into this form of words: "An announcement will shortly be made"; and those whose hopes had been roused really felt, and had some reason for feeling, that the matter would be no longer delayed, and that they would be paid their allowances.
To their astonishment, the Prime Minister came down to the House of Commons, three days ago, and said that these allowances were not to be granted
at all. His words are worthy of examination. They were these:
The Government have made a most careful and prolonged inquiry into the relative position in pay and allowances of all kinds of officers of the three fighting Services—
Let me observe that this careful consideration must have preceded the introduction of the Estimates. It is absolutely ridiculous to say, after the House of Commons has voted a sum of money, that the matter is one which should be further considered. One presumes that the Government devotes its considerations to more important and pressing matters, and leaves the consideration of matters already disposed of alone. What is significant is that this announcement coincided with the granting of a very large and indeterminate sum of money to the coal mines. That question was not kept under consideration week after week and year after year; and it is a much larger sum of money than is required to do justice to this Service.
One cannot avoid the impression—the two announcements coming simultaneously —that in order to grant a subsidy to the coal mines the Government have decided to penalise the naval officers. That is the conclusion to which a large number of naval officers have come; and one cannot avoid sharing their suspicion. A sum of money had been voted by the House of Commons, and it is only taken away at the period when this large sum of money was granted to the coal mines. The Prime Minister went on to say:
They have reached the conclusion that the position of naval officers, whether married or single, taken as a whole, is not inferior to that of officers in the other two Services. In these circumstances they consider that no case has been made out for granting the additional allowance."— [OFFICIAL REPORT, 5th August, 1925; col. 1345, Vol. 187.]
It is rather an amazing thing to say, that no case has been made out for the granting of allowances which the House of Commons has already Voted. And seeing that the Navy has so many enemies do not the Government realise that it is creating a bad precedent to ask the House of Commons to vote money for such a purpose as this and then decide that it had no business to ask the House for the money at all. In future when the Navy Estimates come up for consideration, they will give rise to more furious considera-
tion and examination. This will be cited as a precedent. It will be said that the Admiralty and the Government is in the habit of asking for money which the Navy does not require at all. We have had an unfortunate precedent in the case of cruisers. It is bad to bring the Navy and its affairs into the realm of controversy and give rise to the criticism that the Government asks for money for the Navy which it does not want. It is ridiculous to say that the matter is under consideration when Parliament has already considered the matter.
The Prime Minister, speaking for the Government, has turned this question down on the ground that "The position of naval officers, whether married or single, taken as a whole is not inferior to that of officers in the other two Services." The Member for Galloway (Sir A. Henniker-Hughan) spoke very forcibly on the Navy Estimates, and I understand he is going to speak this afternoon. He will be able to answer that point; much better than I can. But, looking at it with the eyes of a civilian, and having care-fully examined the comparative rates of pay which prevail in the three Services, taking into account the allowances which are paid in these respective Services, one cannot avoid coming to the conclusion that the naval officer is much worse off than his brother officers in the other Services. Had it not been so there would not have been so clamant a demand for these allowances from all sides of the House.
6.0 P.M.
I do not care what figures the right hon. Gentleman has—it is a positive fact, which cannot be denied, that rank for rank, the average pay of a naval officer as compared with that of the Army or the Air Force officer is inferior, and you have no right to take the pay of a naval officer, whether married or single as a whole, and compare it with the total sum paid to the Army or the Air Force officer. You are dealing here with individuals, and individuals matter a great deal. You are dealing here with officers who have wives and families to support. Can the right hon. Gentleman say that these officers in the Navy are not in a worse position than their brother officers in the Army. They have a much better right to claim this marriage allowance than the officer in the Army or in the
Air Force. The naval officer is separated from his wife for much longer periods; he has a much more arduous existence; he lives under much more difficult and hazardous conditions, and he has more uniforms to maintain. The Army officer can have his wife with him practically everywhere. The naval officer cannot take his wife on board ship. He has two homes to maintain, he has more uniforms to keep up, and, what is more, as the hon. and gallant Member for Galloway pointed out, the Navy is an hereditary Service. If you look at the Navy List you will find the names of Admirals perpetuated generation after generation. It is, therefore, ridiculous at this stage to say that you should encourage celibacy in that Service, which has provided us traditionally and consecutively with the most famous sailors in history.
Taken on every ground, I cannot see a single argument that can be raised for depriving the naval officer of an allowance which is given in the other Services. If an Air Force officer—and the Air Force is a very much younger Service—is attached to an aircraft carrier, he gets the allowance in respect of his wife, but the naval officer does not get any in respect of his. Everyone knows that the naval officer is already in a very unfortunate position. I have had many telegrams from naval officers since the Prime Minister made this announcement, and I have had the most sorrowful and pitiful letters from those who wished to send their sons into the Navy but could not afford it, saying that, if this marriage allowance had been granted, it would have assisted them considerably. Their hopes have been raised, but it would have been better to have said definitely that the Government had considered the matter and were making no provision for married officers' allowance, than to have behaved as the Government have done. I am not saying it in any partisan spirit, but it is a most unfortunate and melancholy thing that these officers should have been encouraged to believe, and that their wives, who have their homes to keep together, should have been encouraged to believe, that they were going to get these allowances, that they should have been kept waiting week after week while the Government said they were still considering the matter and were going to
give a decision in a few days, and that then, on the very eve of the day when the House of Commons was asked to vote £10,000,000 for a service which, unlike the Navy, can go on strike and inconvenience the community, this very moment should be chosen for depriving these officers of the money which the House of Commons intended that they should have.

Admiral Sir ARTHUR HENNIKER-HUGHAN: After the extraordinarily eloquent speech of the hon. and gallant Member for Devonport (Major Hore-Belisha), there is very little for me to say on this subject, but I should like to congratulate the hon. and gallant Member on the very excellent way in which he has laid before the House the hardships that the Navy is suffering owing to this recent decision of the Government. I have no axe to grind in connection with this matter. I represent an agricultural constituency: I do not represent any dockyard at all. But I think I am the oldest naval officer, as regards years at any rate, in the House at present, and I felt that I could not let this decision which has just been given by the Government pass unchallenged by me, as one of the naval officers in this House. It was, as the hon. and gallant Member for Devonport has said, stated in this House, I think by the Prime Minister—I was not here at the time—that this extra marriage allowance was not requisite for the naval officer, because his pay had been raised fairly recently, and would be commensurate with what the other Services were getting. About three weeks ago I took the trouble to go and see the Financial Secretary to the Admiralty, and I said to him, "Can you honestly tell me that, if the naval officer gets his marriage allowance, he will be in a better position than his brother officer in similar ranks in the Army and Air Force?" He assured me that that was not the case. He said— I think I am right in my quotation; the Noble Lady the Member for the Sutton Division of Plymouth (Viscountess Astor) was with me at the time —that, even when the naval officer does get his marriage allowance, in many cases he will not be so well off as his opposite number of similar rank both in the Army and in the Air Force. I think that that is a very conclusive argument in favour of the naval officer getting his marriage allowance, considering that it was given
to me by the Financial Secretary to the Admiralty.
I know that old crusted officers used to say to me, as I quoted in my first speech in this House, that in the Navy he who marries is marred, and it is still said that it would be a very bad thing for the Service if young naval officers were married. I do not think that that view is shared by the Admiralty authorities although it is not my place, as a Member of the House of Commons, to quote any-thing I hear or receive from the Admiralty. At the same time, whatever may be the ideas as to the good of the Service with regard to the young naval officer being married or otherwise, the whole point is whether a thing is right or whether a thing is wrong. I do not think that any Member sitting in this House at the present moment can say that it is right that the naval officer should be the only member of the fighting forces not to receive a marriage allowance. It all boils down to that. Arguments can be put forward, and speeches can be made, but that is what it boils down to—whether it is right or whether it is wrong. I am perfectly certain that in this case it is right that the naval officer should receive this allowance.
At present, married naval officers are at a considerable disadvantage. Married officers in the Army or Air Force are not subject to Income Tax on allowances, nor are their allowances subject to the 5½ per cent. cut which was recently made. Consequently, the emoluments paid, with allowances, make Army and Air Force officers considerably better off than the naval officer. I suggest that a committee should be set up by the Admiralty, consisting of two outside civilians who have nothing to do with any Government office, and one Army officer, and that they should decide this point once and for all, so that the House can really come to a proper conclusion as to whether these allowances should be given to naval officers or not. The hon. and gallant Member for Devonport has gone so fully into this question that really there is nothing more for me to add; but I should like to say, in conclusion, that there is no more loyal and efficient servant of the State than the naval officer at the present time, and I am quite certain that, even though this marriage allowance is being kept from him at present, it will make no difference
to his zeal and energy in serving the State. I should like to point out to the House, however, that there has been a great dashing of the hopes which he thought were near fruition, and I cannot help thinking that it will be a bitter pill for him to swallow.

Viscountess ASTOR: The very able speech of the hon. and gallant Member for Devonport (Major Hore-Belisha) covers the whole case that we have to put before the Government. I want to put the Prime Minister's answer on record. Of all the feeble things I have ever heard in the House of Commons, that was one of the feeblest. He said:
The Government have made a most careful and prolonged inquiry into the relative position in pay and allowances of all kinds of officers of the three fighting Services. They have reached the conclusion that the position of naval officers, whether married or single, taken as a whole, is not inferior to that of officers in the other two Services. In these circumstances they consider that no case has been made out for granting the additional allowance."—[OFFICIAL REPORT, 5th August, 1925; col. 1345, Vol. 187.]
No case after the Government had passed £350,000 towards the marriage allowance! The Prime Minister has made no case for his answer. He said at the time the pay was settled a few years ago all considerations were taken into account. If that is the fact why did they make that prolonged inquiry? During the War the naval officer had to have an allowance for his child, otherwise he would probably have starved. After the War, when the Jerram Report was put up and the general rates of pay were improved, that allowance was taken off, but later on the same year the Army and Air Force rates were revised and, in addition to giving them higher rates of pay than in the Navy, they gave a marriage allowance for officers over 30. The Halsey Committee stipulated that the new rates of pay were conditional on three things. The first was the service rates of Income Tax Now the naval officers are paying the full rate. The second was free passages for wives and families going abroad and an allowance. They never got that. Army and Air Force officers have free passages for their families.
Even the Anderson Committee admitted that the pay of naval officers did not com-
pare favourably with the Army and the Air Force so I really feel that the Prime Minister has let us down in the most ununderstandable way at the very moment when he is finding that enormous sum for the miners. I do not think for a moment it was the Prime Minister. I do not think it was the Admiralty. I know who it was. It was the Chancellor of the Exchequer. He was beaten over his cruisers so he took it out of the women and children. That reverses the whole policy of a sailor. He says "Women and children first." The Chancellor of the Exchequer says "Women and children last." I am surprised and deeply hurt, and I think throughout the Service there will be real dismay. The majority of the men in the Navy are Conservatives, so they looked to the Conservative Government. The case has been made out dozens of times. It is no good saying they are in as good a position as the Air Force. They are not. But this is what hurts me most of all. They know, when they come to cut down in the Admiralty, that the Admiralty are there to defend themselves, but when they cut down the marriage allowance there is no one there to defend them. I am certain the Admiralty have done what they could. The people who have really let us down are the Cabinet. This is all at the dictation of the Chancellor of the Exchequer. They need in the Cabinet a woman—someone who will stand up to the Chancellor of the Exchequer. It is a cruel thing to wait for five years, then vote the money, and then at the very last minute say there is no occasion for it. I could give the position of the naval officers' wives. The hon. Member for Dumbarton Burghs (Mr. Kirkwood) could draw the picture. He could wring tears from the House of Commons. And it is true. What those women have had to go through in the last five years waiting for this allowance no one knows. They will not complain. They are not that way. It will not really affect the service. They will go on giving their very best and doing their best for the State and they will not let the Navy down. But imagine what it means to the men abroad who are serving the State to know that the Government have let their wives down.
It is not very pleasant to attack your Government. I do not like it. It is a Government I am more or less responsible
for. I could tell of an officer's wife travelling back from Malta. She had to come back second class, while a petty officer's wife came back first class. When the lower deck men are making a demand, the first thing they ask for is for marriage allowances for officer's wives. The officers fought for their marriage allowances, and they will fight for theirs. I hope before it is too late the Government will stand up to the Chancellor of the Exchequer and tell him to economise on something else. If he wants to economise there are lots of things he can do, but do not take the women and children of the Navy, for it is a hereditary service, not only on the upper deck but on the lower deck. A lower deck man told me the other day that his great-great-grandfather had been a captain under Nelson, and they had been in the Navy ever since. Do you not want the young men to marry, and if they marry do you not want the children educated? Do you not want them to have as good a chance as the wives and children of the Army and the Air. [An HON. MEMBER: "What about the unemployed?"] I am not going to get into any controversy over these. I would have done it five years ago, but it is too late now. I implore the Government at least to reconsider this, and not to make it almost impossible for us who backed them and fought for them in every way. Do not let them do such a really cowardly thing as to let down people who cannot speak for themselves.

Mr. HARRISON: I entirely agree with every word that has been spoken on this subject. The points that have been made do not require to be made again by me, but I am sure the House will be interested to know from the Financial Secretary to the Treasury to what purpose the money which has been voted for marriage allowances is to be devoted. The disappointment is intense. If, as the Noble Lady the Member for Sutton (Viscountess Astor) has pointed out, we have to look to the future, and if we are to have a rising generation suitable for the Navy, we might as well look at what is the existing pay in the Navy. I happened to pick up a volume of the Naval Estimates, and I find that a midshipman's pay is £73 a year. In the Navy of to-day and in the Navy of the future it will not be always possible for young
men to go into the Service with a financial backing behind them.
If you are going to pay youngsters who start in a Service in which they are going to make a life career, £73 a year, the position will be very difficult. A youngster, the other day, a midshipman, whose parents are not too well off, told me that after paying his messing allowances and other allowances on board ship, he had a balance of half a crown at the end of the month. He will never be able to save anything out of that for marriage. If we take the age at which marriage generally is indulged in by those who are fortunate enough to indulge in it, and if you take a lieutenant-commander of about the age of 30, he receives on promotion £517, rising to £587 at the end of four years' service. That is not a sum of money on which young officers can maintain two homes. The Navy of the future will be based more upon our shores than in the past. Therefore, this question of marriage allowance is of prime importance.
The other day I asked the Financial Secretary whether he would not grant to naval officers a privilege which I believe is enjoyed by the other two Services in regard to medical attention. I suggest that when these young men have the fortune to marry and to be blessed as parents, it would be a considerable help to them financially if they could get medical attention for their wives. He replied that under Vote 8 they could get it; but I find that is for dockyard personnel. There are many officers' wives who live in and around our dockyard towns, whose husbands are not borne on Vote 8, and whose husbands are serving on the high seas. Where a medical staff is centred in these dockyard places, the wives within reasonable distance might be given the privilege of medical attention. That would considerably help these officers in the case of medical attention for their families.
We appreciate the fact that economy is very necessary. Economy is a virtue, but parsimony is a vice, and one of the deadliest vices if it is applied to the defence forces of this country.

Mr. GUINNESS: I can only answer the points that have been raised, by consent of the House. Perhaps it would be convenient if I now reply to the points
raised so skilfully and sympathetically by hon. Members for dockyard constituencies and other hon. Members who are in touch with the Navy.

Sir H. FOSTER: Will the right hon. Gentleman cover the point of the implied pledge which has been given by the publication of the Naval Estimates, and by a Vote of the House of Commons?

Mr. J. JONES: On a point of Order. May I ask why no speaker on the Labour side has been allowed to take part in this discussion? Some of us have something to say.

Mr. SPEAKER: That is not a point of Order. Two subjects have been initiated from hon. Members above the Gangway on the Opposition side. The other parts of the House must have a turn.

Mr. MAXTON: While it is true that those Debates were initiated from these benches, the Debates were not solely participated in by the occupants of these benches. When the right hon. Member rose to speak again, with the consent of the House, it is very questionable whether the Members on these benches are prepared to grant that.

Mr. GUINNESS: I should be prepared to give way.

Mr. SPEAKER: The right hon. Gentleman is prepared to give way. Mr. Jones.

Mr. J. JONES: I am much obliged to you, Sir, and to the right hon. Gentleman for giving me an opportunity of speaking on this matter. We do not represent dockyard constituencies, but we are in sympathy with the claim which has been made. We agree that every man and every woman who serves the State ought to be recognised as people of importance in the State. I only wish those hon. Members opposite when they had a chance a few weeks ago would have treated all the servants of the State in the same way. We claim that the man and the woman who works in mine, factory or workshop are entitled to equal consideration with those who wear uniform. Unfortunately, we discovered when we were putting forward the claims
of these men, women and children that some of those hon. Members who have been most sympathetic and enthusiastic and emotional in their appeals to-day walked into the Division Lobby against the workers who happen to be unemployed. As far as we are concerned we are willing to go into the Lobby to see that justice is done to all the servants of the State serving in the Navy, the Army or anywhere else, and we want equal justice done to the people who have to keep the Army and the Navy. The Army and the Navy cannot keep themselves. They have to be kept by the labour of the people. If you are to treat the Army officer and the Naval officer as a person who ought to be treated decently, we agree with you, but we want the same treatment for every citizen who does useful service in return for the nation to which they belong.
I want to raise another matter, perhaps of a less serious kind. The Chairman of the Kitchen Committee is present. Reports have appeared in the newspapers recently that a revolution has taken place in the constitution of the Kitchen Committee. The hon. Member for Dunbarton Burghs (Mr. Kirkwood) has been elected as a member of the Committee, and I congratulate him upon that high honour, although it is below stairs. One of the matters that has been raised is the question of porridge for Members of the House after 9o'clock at night. That may be a Scottish dish. I do not know much about it. I was brought up on "stir-about" in Ireland. I am led to understand that the hon. Member has been specially commissioned to go to Scotland to discover the best way of making porridge, and to purchase the necessary utensils. I do not know whether the Chairman of the Kitchen Committee can give us definite information on this great problem. What I want to ask is whether London Members particularly those who live in the East End, can have special arrangements made so that we may have fish and chips after nine o'clock. There are a number of us who would be glad to provide the necessary material and all the essentials for doing the thins in the proper manner.
A report appears in the Press this morning that the Committee have decided to allow Members of Parliament a certain amount of grace in the payment of their bills, and that 10 per cent. increase will
be charged if the bills are not paid within a limited time. I want to know if they take the Members on their faces or on their banking accounts. Some of us cannot get any credit at all, because people know that very often we cannot afford to pay, but we do want to know something of these great matters of importance. The Chairman of the Kitchen Committee has kindly consented to be here to hear what I have to say, and I would ask him if he is prepared to tell us what is the exact position of the hon. Member for Dumbarton and the Kitchen Committee?

Mr. GUINNESS: While the Chairman of the Kitchen Committee is considering his reply to the hon. Member, perhaps I might be allowed to refer to the question of marriage allowances in the Navy. The hon. Member for Devonport and others have asked why this money was put in the Vote if it was not intended to institute a system of marriage allowances. The answer was made perfectly clear at the time. It was stated in the Debates on the Naval Estimates on 19th March by the First Lord of the Admiralty that this money had been put in pending a decision by the Government. He said:
The present position is that the Admiralty have put up what they believe to be a strong case in favour of marriage allowances being granted. That case has been submitted to the Co-ordinating Committee now sitting, which I hope will shortly report to the Cabinet.… We have calculated roughly that the cost will be about £350,000 for naval officers' allowances if our proposals are accepted by the Co-ordinating Committee."—[OFFICIAL REPORT, 19th March, 1925: col. 2520, Vol. 181.]
So there was no reason for misunderstanding from the very start, when the Estimates were first published.

Major HORE-BELISHA: On what does he base the figure of £350,000?

Mr. GUINNESS: That was the scale of allowances put forward by the Admiralty. As the hon. Member knows, it has been continually dealt with by question and answer in the House since then, and I cannot believe that there is any officer who has studied the Estimates, and has been looking over what happened in Parliament, who could be in any doubt on the matter. A new doctrine has been enunciated by the hon. Member for Portsmouth (Sir H. Foster) that the House, by passing this Estimate, practically im-
posed on the Government the obligation of paying these marriage allowances.

Sir H. FOSTER: It was an implied pledge.

Mr. GUINNESS: It is an entirely new doctrine that there is any obligation on the Government to expend up to the maximum provided for in the Votes.

Major HORE-BELISHA: Are you going to spend the £10,000,000 on the miners?

Mr. GUINNESS: There is no obligation to spend it.

Mr. MAXTON: God help you if you do not!

Mr. GUINNESS: In the case of all these Estimates, the Executive of the day is in no way bound to spend the money. The question was asked, what would happen if the money were not spent; and various suggestions were made as to the object to which it was to be diverted. Of course, the answer is that if the money is not spent, like any other surplus, it is surrendered to the Exchequer. Every year, I am glad to say, we get these surrenders.

Major HORE-BELISHA: The Admiralty can use it for something else, by virement.

Mr. GUINNESS: With Treasury approval, but it would be virement.

Mr. BUCHANAN: To build the new cruisers?

Mr. GUINNESS: It had nothing whatever to do with the cruisers.

Mr. BUCHANAN: It could be put to that use?

Mr. GUINNESS: It could be transferred or go back into the amalgamated balances at the disposal of the Government, or for any other purpose. It had equally nothing whatever to do with the decision about the mines. The noble Lady will remember that this matter was being considered by the Admiralty long before any question of a mining subsidy arose. There is no deep motive to apply the money to any other form of expenditure. The matter has been considered by the Government, and in their judgment it had
to be turned down on its merits. Let me briefly explain the case as it appears to the Government. The scale of pay and allowances in the Navy is largely based on the report of the Halsey Committee of 1919. Deliberately, at that time, the Navy chose to have higher pay and to forego the system which found favour in the Army of lower pay and higher allowances. The Navy did that with their eyes open and for reasons which seemed good to them.

Major HORE-BELISHA: The Army scale was fixed afterwards.

Mr. GUINNESS: Naval officers deliberately, with their eyes open, preferred not to have this system of marriage allowances. The report of that Committee was co-ordinated with the inquiries which had taken place as to the new scale of pay for the Army and the Air Force, and the whole scheme of each service was compared with the other schemes. It is true that the Army had a different system, but it was coordinated at that time, in 1919, and the Army chose to take lower pay and to have fuel and light and lodging allowances at a higher rate.

Sir A. HENNIKER-HUGHAN: Can the right hon. Gentleman say that if the marriage allowance was given to Naval officers now they would be in a better position, rank for rank, than Army officers?

Mr. GUINNESS: I will come to that in a moment. Since that arrangement was come to, the value of the pay has undoubtedly become higher. The cost of living was 110 per cent. above pre-War level at the time, and it is down now to 75 per cent. It is true that there was a deduction of 5½ per cent., but that is not the equivalent of the fall in the cost of living. No doubt a strong demand grew up afterwards for a system of marriage allowances, and the hon. Member for Sutton has indicated to us how this feeling started. She mentioned that the Air personnel had these allowances, and the Navy would like to have them too. There is no doubt there has been a strong feeling in the Navy that there is an injustice. Under this Government and, I understand, under the last Government the matter has been gone into. I have made
inquiries as to the Committee which was said to have been set up by the last Government and to have reported in favour of this concession, but I can get no information on the subject whatever, and it certainly never reported to this Government.

Sir H. FOSTER: The right hon. Gentleman knows that the warrant officers and the lower deck had the marriage allowance.

Mr. GUINNESS: That was under another Committee which also sat in 1919. The present Government examined the matter exhaustively. First there was an inquiry between the Treasury and the representatives of the fighting Services and that inquiry was not of a perfunctory character as has been suggested. As a matter of fact, it examined the conditions, rank for rank and age for age, and as far as possible on a truly comparable basis between the three Services. After that there was a Cabinet Committee and all these inquiries have been directed towards deciding what is the true relativity of the rates in the three Services. Possibly we may find at one period of service an advantage in favour of one Service and in another period of service an advantage in favour of another, but taking it generally, the inquiries do not show that there was any case for giving this concession to the Navy or that it could he done without upsetting the relativity with the other Services which was carefully co-related in 1919 and without provoking equivalent demands from the Army and the Air Force. The Government have gone into this with the greatest sympathy and the greatest care—

Viscountess ASTOR: May I remind the right hon. Gentleman of what the Anderson Committee said?

Mr. GUINNESS: I do not know exactly what the Anderson Committee said, but that was before the other Committee which recently went into the matter. It clearly would not have been sound, to allay discontent in the Navy at the expense of arousing fresh discontent in the sister Services. At the present time, it is difficult to justify any increase in pay or allowances. As the House knows, there is a movement for reducing the pay
of new entrants into the Services. Of course, there is no question of interfering with existing contracts, but the matter is being examined with a view to finding what should be a fair rate of pay for those who in the future enter the Services. Besides that, demands are continually put forward by the lower deck which for reasons of economy have to be rejected. Side by side with the position of the Services there is the position throughout the industries of the country. All classes are being obliged to look closely into the standard of life which is possible in our present difficulties, and I think for these reasons, unless an actual clear injustice can be made out as regards one Service as compared with the two sister Services, it is not a time to increase the burden on the Exchequer. I cannot for that reason hold out any prospect that this subject will be reopened.

Sir GERALD STRICKLAND: I beg to refer to the urgency of speeding up cotton growing within the Empire.

Mr. J. JONES: On a point of Order. Cannot I have an answer to my question from the Chairman of the Kitchen Committee?

Mr. SPEAKER: That does not rest in my hands.

Sir JAMES AGG-GARDNER: I did not know the hon. Member for Silver-town (Mr. J. Jones) desired a distinct answer to his question. I thought his remarks were more in the nature of a somewhat humorous criticism of the conduct of his colleague the hon. Member for Dumbarton Burghs (Mr. Kirkwood), and that, therefore, any reply should come rather from him than from myself. I am glad to say that the Kitchen Committee fully appreciate the assistance which has been presented to it by the hon. Member for Dumbarton Burghs. There is, however, one matter to which I should like to refer, and that is the suggestions which have been, I am sorry to say, somewhat loosely broadcast, to the effect that hon. Members omit to discharge the debts they have incurred to the Committee. Those suggestions are entirely uncalled for. I have been 20 or 30 years a member of the Kitchen Committee, and I have never known any occasion on which a Member has incurred a bad debt. Though at times sums may be owing, we know full well that they will
be met before the Session closes, and there is not the slightest ground, I can assure the House, for the suggestions in question.

Sir G. STRICKLAND: With regard to the urgency for speeding up cotton growing within the Empire, the arguments are too well known to make it necessary for me to elaborate them, but I wish to bring to the notice of my right hon. Friend that the financial education and routine mentality of Colonial Office officials are not suitable for taking the financial risks that have become necessary in dealing with this very urgent question under present conditions. It is more to the point that those methods should be adopted which are practised by responsible Ministers for the development of new countries like Australia. There should be less red tape and greater risks should be taken, and greater facilities should be given to private enterprise on far broader and more speculative lines than Crown Colony officials are trained for or are allowed to be in the habit of taking. As in Australia, there is the added value of the unearned increment of the improved land to give a margin for bold financial experiments. There are now three bodies dealing with cotton development, and they should be under a special Department and co-ordinated.
The Cotton Growing Association was started when I was administering a cotton-growing colony: it and two other organisations are still acting independently. I wish to pass to the repeated suggestions for low temperature carbonisation of coal. When that comes into practice, according to scientific experts, we shall have 8,000,000 units of heat from each ton of coal instead of 4,000,000, wherefore more miners will be thrown out of employment, and more subsidies will be required. The demand for oil instead of coal is increasing and probably one of the remedies that will have to be applied is to arrange from to-day for emigration to Australia as well as for migration to the better paying coalfield of South Yorkshire. If we are to solve the coal trouble of England, the most important thing is to ascertain how we may be able to produce coal cheap enough to compete with other countries, who are our rivals in the foreign market, and perhaps it would be very much better
if some of this £10,000,000 or £20,000,000, or whatever the total may be, were spent immediately by the Government in acquiring the necessary royalties—[HON. MEMBERS: "Why?"]—and mining rights and sink new profitable pits. If we are to compete successfully with foreign countries, we must transfer the mining population as soon as possible to where coal can be raised profitably.
I wish next to say a few words about the gold standard. [Interruption.] The Chancellor of the Exchequer very properly pointed out the many reasons for which the inflation of the currency would be ruinous, but he did not take all the well-deserved credit to himself, which might justly be claimed on account of the adoption of the gold standard. That step means, and has created a large and increasing augmentation of wages owing to the increased purchasing power of money of to-day, and this is enjoyed not only by the workers, but by every wage earner in the country. Nevertheless, the Chancellor of the Exchequer should realise that a parallel and probable result will also be that in three or four years' time we shall have to face a shortage of gold in Europe and a revival of the bimetalic problem.

Mr. JOHNSTON: On a point of Order. May I ask how the hon. Member can connect the question of the gold standard with low-temperature carbonisation?

Sir G. STRICKLAND: I am entitled on the Adjournment to pass from one subject to another, and I am now passing to the next subject. My right hon. Friend, in proposing his Estimate, referred to the speech that Mr. Deakin delivered at the first Colonial Conference of 1887, at which I was present. The inspiring feature of that speech was to claim social and political equality for the Dominions. May I point out that the division of the Colonial Office into new Departments has been so long talked about, that its political and psychological influence has long been discounted. I venture strongly to urge that practical steps be taken in the direction indicated by Mr. Deakin to bring the Colonies closer to us. I have been an intimate friend of Mr. Deakin and other eminent legal personalities in Australia, and I think I can with confidence submit as a well-thought-out necessity that the high judicial officers from
Australia who are made members of the Judicial Committee of the Privy Council, as a personal honour, should be put in actual fact in a position really to exercise the functions of members of the Judicial Committee for fixed periods in turn, and with suitable emoluments and allowances. It is not respectful to these great Colonial Judges to make them members of the Privy Council, and not make it possible that they should sit. Their salaries and travelling allowances are matters of detail of that kind for which, if in this connection no provision can be made in our Estimates, the Dominions are certain to be ready to come forward.
To pass to another subject—that of the salaries of Cabinet Ministers and Governors—may I point out that their salaries were fixed long ago in round sums, and before the days when Income Tax stood where it stands to-day. No industry is more sweated than that of Australian Governors, where the salaries are altogether inadequate and require to be largely supplemented from other sources. Successive Secretaries of State, for one reason or another, have not found time to deal with this question, and in view of that omission it is almost impossible to fill the Governorships in Australia in the ordinary way: even with giving titles the whole system requires co-ordination to the present value of money. Comments have been made, principally by hon. Members above the Gangway, on the system of government known as diarchy. Hon. Members perhaps do not realise that three-quarters of the Empire, if not more, is governed under a diarchical system. May I say, as an example, that we have evidence of diarchy in the contrast of the buildings of the County Council of London and this House on opposite sides of the Thames.

Mr. SPEAKER: May I point out to the hon. Member that that is a matter which would mean legislation.

7.0 P.M.

Sir G. STRICKLAND: I am endeavouring to give examples of the division of functions exercised by such legislative bodies in Australia as the Federal Parliament in contrast with State Parliaments, which furnish a parallel worthy of attention. The same division of functions applies to the Parliaments of the Provinces of Canada and the Federal Parliament at Ottawa. In reference
to this division of duties, the higher functions—that is to say, the federal functions—are exercised by the Federal Parliaments. There, however, are two portions of the Empire, Southern Rhodesia and Malta, where there is a similar division of the functions of government of a federal character, but with this feature, that the superior functions still remain in the hands of this Imperial Parliament. In the same way as there can be no constitutional objection raised in the Federal Parliament of Australia if anyone is discussing matters that appertain federally, for instance, to Tasmanian problems, so also the Parliament of Malta discusses the functions assigned to it, and the remaining functions of federal government have to be discussed here. This is the only place where anyone can discuss the functions of government with reference to Southern Rhodesia and Malta, which, by the constitution of their Parliaments, have been taken away by new Constitutions from the local Parliament, and reserved to the Imperial Parliament. When referring to the Irish Free State, my right hon. Friend himself referred to matters under discussion in the Free State Parliament when proposing his Estimates, in such references to other Parliaments the only point of real importance is to be careful to observe where the line of demarcation is to be drawn as to the respective functions of the subordinate Parliament. Under these conditions, I am sure my right hon. Friend, who is an expert in constitutional law, will be the last to object to discussion here of reserved matters concerning Malta, which continue to be directly under his responsibility. The matter of first importance to which I wish to refer is the partial suspension to-day of the constitution by continuing to still keep vacant two seats in the Senate.
I will not discuss the stages of that suspension previous to the reservation of a Bill, but only speak with regard to the stages where imperial officers share the responsibility at a later stage. The constitution of Malta is an English document. It was framed by English lawyers, and the words used therein must necessarily have the meaning and the definition and the sense required by English law. Therefore what is a trades union in English law must be the sort of trade union con-
templated under the constitution of Malta. If something different is created by definition, the constitution is changed, and it can only be altered by a majority of two-thirds in each House of the Legislature. If the Constitution is added to or is otherwise changed the person responsible for the change being, according to law, the right hon. Gentleman the Secretary of State for Colonial Affairs. In referring to the illegality of receiving a Bill passed by less than two-thirds majority, I submit that I am no more exceeding the limits within which I may speak here than was my right hon. Friend himself in the words he addressed to this House a few days ago with reference to grants of compensation to Irish Loyalists in the Parliament of the Free State of Ireland.
Another point to which I wish to refer is this: It is the duty of all Colonial Governors—I am speaking in general, and I have had experience in the position myself—not to interfere in local politics. When there is that interference, it becomes the duty of the Secretary of State to intervene to abate that interference. It has been publicly stated in Debates in the Parliament of Malta—I am not talking of the present Governor—

Mr. SPEAKER: I have already told the hon. Member that he must not abuse his position in this House by referring to Debates in another Parliament, or to things which divide Members in another Parliament. If he knows anything about the constitutional position, he will realise that that would be the breakdown of our whole system of self-government within the Empire, and I must absolutely maintain that I shall never allow discussions of that kind to take place on the Floor of this House.

Sir G. STRICKLAND: I had no intention whatever of referring to the action of any other Parliament. I only mention the Debates as a source of evidence of fact. What I was saying was that when a Military Governor intervenes in local politics, my right hon. Friend becomes responsible for abating that interference, and for inquiring as to the responsibility of professional advisers appointed by the Colonial Office. It might have been questioned whether I had any evidence to prove that there has been political interference. I was only referring to the
Debates as evidence of the making of that statement by those who asked to prolong the Governor's term of Office, and I would never have dreamed of entering into the Debates as such.
The other point to which I shall refer is that when specific complaints are made on a matter having reference to the functions of government under the responsibility of my right hon. Friend, the proper procedure is to appeal to him with written statements asking that the grievance shall be considered and dealt with on its merits; and then, if it is impossible to obtain consideration of any grievance or complaint in that way, it becomes a duty to bring the request for inquiry before this House because if the idea is engendered in the Colonial Service that permanent officials can commit wrong with impunity and that there is no appeal, it is impossible for the Colonies not to resent it and the whole Colonial Service will become demoralised.
As a matter of fact, the excellence of our magnificient Colonial service lies in this, that every Governor knows that when he comes back to England he is liable to answer before the English Common Law for any act done during his administration. On this particular subject I have tabled a motion for papers which contain the charges on which I have asked for inquiry, and up to the present I have had nothing but refusals. Therefore I hope that the Colonial Secretary, in the interests of his own prestige and his own reputation for efficiency and fairness, will grant the inquiries asked for as to matters for which he is responsible to this House.

The SECRETARY of STATE for COLONIAL AFFAIRS (Mr. Amery): A week ago my hon. Friend who has just sat down proposed to reduce my salary by £100. I now gather that he considers that my salary is inadequate. The hon. Member has blessed the gold standard and I will report his blessing to the Chancellor of the Exchequer. As to the problems he has raised with regard to Malta, I have not the slightest idea what he is driving at, beyond this, that he has referred to the interference of the Governor in local politics. Against that charge I make the strongest possible protest, and I wish to state clearly to the House
that there has been no interference whatever on the part of the present Governor of Malta in local politics, or of his predecessor (Lord Plumer). No Governor, with the responsibility placed upon him as the representative of His Majesty, would ever think of doing anything that went beyond his constitutional duties and functions.

OlSir G. STRICKLAND: I will take the responsibility of proving what I have given in writing.

Mr. AMERY: I protest against the attitude which has been taken up by the hon. Member because what he has been raising are really his own personal and party grievances in Malta politics. Had he dealt with any specific question I should have been only too glad to answer him. He has done nothing except to make allegations and insinuations, and all I can do is to say definitely that I cannot for one moment admit the kind of accusation and inuendoes to which he has been submitting representatives of the Crown and British officials in Malta ever since he has been in this House.

Orders of the Day — WAR PENSIONS.

Mr. BUCHANAN: I desire to raise another question which differs very much from Malta, and which is much nearer home. The Minister of Pensions is rather fortunate to-day in finding me in a much better frame of mind towards him and his Government than is usually the case. Perhaps the fact that some of us are going to Scotland and will be away from England for 14 weeks has induced that better frame of mind; but he must not take it as being a precedent for the future if I speak mildly to-day. I want to raise the case of one or two pensioners in my own constituency. The first is that of a mother whose son was killed during the War, but let me first of all, in a few brief sentences, condemn the underlying principle in this matter. Hon. Members will remember that under a previous Conservative Government circulars were issued to mothers of soldiers killed during the War—something to this effect, the Department had made inquiries into the earnings of their son who was killed during the War and on which she had been in receipt of a pension of 13s. or 14s. The Department now say that the earnings on which the pension was granted was wrong, that
an error has been made, and they say now that the pension must be reduced from 13s. or 14s. to 5s. or 6s. This is five years after the death of the lad. The mother, after all this time, is notified that the amount given as the earnings of her son of five years ago was an error, and she is now asked to submit to a reduction of her pension.
It may be argued that this practice was continued by the last Labour Government; but that is no argument to me. The thing is whether it is right or wrong, and I say that it is wrong. I have the case here of a Mrs. Williamson, whose son was killed in the War. Five years after his death the Ministry of Pensions send out a circular stating that an error was made five years ago in the earnings of her son. I want to put it to any hon. Member whether he could prove five years after his son had died what his earnings were years ago? There is no Member here who could do that. And here the Government come to a poor old widow and say that an error has been made in her son's wages, and they ask her to disprove the statement. They are issuing circulars all over the country reducing the pensions which were granted five years ago. In this case the circular says:
The error consisted in the fact that the assessment in question was based upon wages actually being earned by your late son at the time of his enlistment. It has, however, been ascertained that these wages were, owing to war conditions, higher than that for pension purposes.
Then it goes on to state certain other facts. In the first place, the woman denies ever having got this circular. All that she says occurred was that a woman came and made some inquiries at the house. I afterwards pointed out that they were wrong in stating where the lad last worked, but here it is said that there was a mistake, when, after the lapse of all that time, no one can prove anything very definite, even from the employer's books.
I had another case, where the reduction was from 13s. 10d. to 5s.—8s. 10d. taken from a poor woman on the ground that they had made a mistake as to the wages of her son who had been killed in the War, and that was after five years, when she really did not know who his employers were. I met her up here—a clean, tidy, decent body. She did not know anything
about where her son worked, and I myself had to go and seek out a clergyman who knew the lad, to find out whether he could tell me, as he ultimately did, where the lad last worked. There was another case that I brought to the notice of the Minister, the case of two brothers named Gallacher, who both joined the Army on the same day. One was killed and the other came back. A circular was sent stating that the pension would have to be reduced because an error had been made. In this case I went to the firm and found that they had returned the wrong sums, but when I took that to the Ministry they said, "That is quite true, but there has been a mistake, and we must still reduce the pension on account of the allocation of the money by some other method."
That is the kind of method at which the Ministry of Pensions has now arrived. It is one of the shocking things in the case of the last Government that they could not put that right. I hope the Minister will not tell me about what someone else has done, but will bear his own cross. Another case was that of a lad named Cassidy, who worked for a firm in my district which collapsed or went out of business in 1920. A year or so after, a circular was issued stating that inquiry had been made of the firm, and it had been found that the wages were not right—a year after the firm had closed down. In addition this lad, like many others, earned money by other means—at picture houses or public houses for instance—on Saturday nights or on week nights after his day's work was finished, and his father actually submitted to me the names of people with whom this lad had been employed in his spare time, but because the firm were out of business, and no definite proof could be furnished, his mother's pension was reduced by 5s. or 6s. a week.
It seems to me that these cases are shocking. There is only one other that I wish to raise, relating to a man in my district who has been refused a pension, although he is absolutely unfit to continue his work. I myself, a few weeks ago, got him examined by local medical practitioners, who confirmed his unfitness. The difficulty arises as to whether it is attributable to the War or not. I do not think that in this case the Minister denies that the man is stone deaf, but what is
denied is that it is attributable to the War. I admit that the Appeal Tribunal turned it down, but in this instance—I do not want to give the facts in detail at this late hour—I would appeal to the Minister to reconsider the case of this man, who unfortunately is unable to get any work at all. All the local evidence I can get goes to prove that that is on account of his war service. I admit that the medical officers of the Ministry of Pensions do not agree with that, but I am sure the Minister, if he would go into this case again, could find a connection between the man's unfitness and his war service. It is a terrible thing to see a grown man, who served his country well during the War, who has young children dependent upon him, unfit owing to deafness to follow his occupation. He is in the building trade, and no building employer will employ a deaf man, who has to go up on to a scaffold and is not able to hear what is going on around him. All I ask in that case is that the Minister should reconsider it, and, if possible, see if some justice can be meted out.
In regard to the first cases I have mentioned, I hope the Minister will not pursue the policy of saying, four or five years after a lad has been killed, that there is an error. No woman can adduce proof of such facts after even a year. I know that my mother, who is, possibly, more methodical than some others, could not do that with her sons, and it is terrible, in the case of these very poor people, who can only exist and no more, to come five years afterwards and awaken the old griefs in their homes, and then reduce their pensions. I think it is a mean practice, and I am sure it would redound to the credit of the Minister of Pensions if he would see that these amounts, which are already too small, are put back to their normal figure, and so allow the mothers of these dead lads, to live in at least semi-decency.

The MINISTER OF PENSIONS (Major Tryon): I am sorry that the hon. Member, through no fault of his own, has not given me much time in which to reply, but I can assure him that the representations he has made on behalf of these men and women will be considered irrespectively of whether I have time to deal with
them fully now. The hon. Member has spoken as though this country were treating the dependants of ex-service men badly. It is only right that the House should know the general position, therefore I will give a few figures.
We are paying 192,000 pre-war dependants' pensions. We are paying them 9s. 9d. a week on the average, on the assumption that their sons, had they lived, would have been contributing 9s. 9d. weekly to their parents to-day, I do not think—and I am speaking for successive Governments, that this general principle is ungenerous, seeing that it is quite obvious that the average son, had he lived, would not have been contributing always about 10s. a week. Moreover, we have to bear in mind the fact that we had assumed that the sons would not have died from some other cause and would have kept on their payment. We also assumed that the son would not have married and have had a family. Had he married and had a family, he would not have been able to contribute. Speaking generally, I do not think we have been ungenerous. The estimated annual cost is £4,735,000. Moreover, there are 37,500 need pensions at 12s. 6d.,of which the estimated annual cost is £1,086,000, and over 101,000 flat-rate pensions of five shillings, amounting to £1,279,000. Therefore, the House will appreciate that there are an enormous number of these dependents receiving pensions. With respect to the cases that have been raised, I have had notice of them. I have gone into them, and I will go into them again. In the case of Mrs. Williamson, the pension was 11s. 6d. a week.

Mr. BUCHANAN: With a bonus, which brought the amount to 13s. 10d.

Major TRYON: Yes, 11s. 6d., plus bonus. The son was an apprentice, normally earning 6s. 9d. a week. That was the basis on which the revision took place. Nobody dislikes more than I do the necessity of reviewing these pensions, but there were many cases in which people were getting more than others. I do not mean cases where the sons had been contributing more to their parents before the war, but cases where some parents were getting more pension than others through their having made a perhaps genuinely mistaken statement about
the amount that they had been getting from their deceased son. I will look into this particular case, but I do not think there is much chance of any change being made.
In the second case, that of Mr. Peter Meechan, an answer was sent by Mr. Muir, who was Parliamentary Secretary to the Ministry of Pensions in the late Government. In this letter, which was addressed to the hon. Member for Gorbals (Mr. Buchanan), Mr. Muir said:
It is found that, when Mr. Meechan was examined at the time of his demobilisation, it was the opinion of the medical board that the deafness from which he suffered was not caused by war services, but had been aggravated thereby.
That meant that the deafness was there previously, and that he had become more deaf as the result of war service. That was the answer sent on behalf of the late Government. In view of the representations of the hon. Member for Gorbals, I have had a further examination made, and the medical reports states:
I am of opinion that this man's condition has not deteriorated, and that it is impossible to affirm that any condition connected therewith to-day requiring treatment would not have been present save for the prior worsening by war service. In these circumstances, I am of opinion that the man is not eligible for treatment for his deafness in accordance with the instruction.
In other words, with every good will towards the case, I have had a further medical examination made, and the result of that medical examination is to confirm the justice of the reply sent in respect of the same case by the late Government.

Mr. MAXTON: That is a purely negative statement.

Major TRYON: The fact is that he was deaf before the War.

Mr. BUCHANAN: When the man joined the Army he was passed A.1. There was no sign of deafness about him when he joined. That was only trotted out when he was discharged from the Army.

Major TRYON: That statement is not offered simply by my Department at the present time, because a letter was sent on behalf of the Pensions Ministry in the late Government, by Mr. Muir, in which he stated that the deafness had been aggravated by war service, which means
that the deafness was there before, and that it had been made worse by war service.

Mr. LANSBURY: Was he passed A.1.?

Major TRYON: I cannot say without looking at his papers; but I will inquire and let my hon. Friend know. I will, of course, examine the case further. Our position is that I have had a further medical examination made on the strength of the communications and representations made by the hon. Member for Gorbals, and I have stated the result. In the case of Mrs. Cassidy, a reply was sent to the hon. Member for Gorbals in November.

Mr. BUCHANAN: One of about 20 replies.

Major TRYON: The hon. Member's persistence and the extent to which the case has been explored would show that if there was much more in the case, it would have been successful. I do not think the fact that it has been frequently examined is evidence that it is wrong. I should think the fact that successive Governments have examined the case and confirmed the decision would rather suggest that the decision was right. The hon. Member for Gorbals was informed by Mr. Muir that
When Mrs. Cassidy completed her claim to separation allowance in respect of the deceased soldier, she stated that her son contributed 20s. weekly to household expenses; that she made no reference to the additional wages now alleged to have been earned by him, and that it had not been possible to verify the amount as the employer cannot be traced.
The hon. Member for Gorbals was informed that
It has been agreed to accept the statement in so far as it would admit of the soldier being in a position to provide himself with pocket-money and part of his clothing. From the contribution of 30s. Mrs. Cassidy had to provide her son with his board and the remainder of his clothing.
It is obvious that if a son contributes something to his parents in return for his own board or in return for food, the whole of that sum cannot, rightly, be considered to be a contribution from the son to the maintenance of the parents. Therefore, we have to investigate these cases in order to do what is just. I will
further examine the cases which the hon. Member has brought up, but I am not hopeful that in any of them we shall be able to make any revision.

Mr. MAXTON: Do your. best.

It being half-past Seven of the Clock, MR. SPEAKER adjourned the House without Question put, pursuant to the Order of the House of this day, until Monday, 16th November, pursuant to the Resolution of the House of this day.